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Income below 44ad

CA SONIYA AGARWAL (self practice) (3005 Points)

28 July 2013

If a partnership firm has its income below 8% as prescribed u/s 44 AD of Income tax Act, audit is compulsory. In that case will income be considered below interest/ remuneration or after that to declare income below 8 %

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10 Replies

sanjay singhal (CA) (987 Points)
Replied 28 July 2013

Audit will be required us 44 ad In case of partnership firm having less profit than 8%

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Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 28 July 2013

under sec 44AD,u should consider 8% on gross receipts.wheather u offer below 8% or 8% or above 8%,u should not consider remuneration and interest .so if u adopt presumptive taxation under sec 44AD,u need not consider them

furthur when u dont opt for 44AD,u need to consider Limits prescribed under IT act

for Inrerest it is 12% on simple interest basis and for remuneration

up to 3,00,000=150000 or 90% of book profits which ever is higher

above 3,00,000=60% of book profits

INTIMATE ME IF IAM WRONG ONCE U CONFIRMED,THANK U

1 Like

CA Nitin K. Varshney (FCA DISA CCA Peer Reviewer (ICAI)) (616 Points)
Replied 28 July 2013

Dear Nuli swami,

your answer is absolutely correct. you explain it very well.

1 Like

AKSHAY PAL (ARTICLE) (88 Points)
Replied 29 July 2013

hello sir,

Can any one tell me,if a individual person have been profit less than 8% in last financial year & audit have done in last financial year.

Whether the TDS provision applicable has to that assessee in current financial year or not.

Thanks In Advance

CA. Sonali Gupta (Practise) (96 Points)
Replied 29 July 2013

Yes TDS provisions will applicable if audit have done in last financial year.

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CA Nitin K. Varshney (FCA DISA CCA Peer Reviewer (ICAI)) (616 Points)
Replied 29 July 2013

Yes TDS provisions will be applicable on him, but it is optional. whether he can deduct TDS or not.

Nipun (Others) (51 Points)
Replied 29 July 2013

Hi,

Please advice the audit rule for Air ticketing business where margin is hardly 2%......

Regards

Nipun

CA. Sonali Gupta (Practise) (96 Points)
Replied 30 July 2013

Commission received on booking of air tickets is receipt u/s 44AB. If your commission is above Rs 1 Crore or net profit is below 8% of gross commission received than it will be liable for audit.