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Income tax under presumptive taxation

12 January 2018

If some one is declaring his income on presumptive basis under sec 44AD for AY 18-19 and wants to declare his income more than 6/8 % of gross turnover. Can he do so or can declare only 6/8 % of gross turnover.. And if declare excess than 6/8 % any additional requirement imposed by law??? Please suggest...

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10 Replies

prasad Nilugal ( GST Practitioner & Accounts ) (14801 Points)
Replied 12 January 2018

Under section 44 AD , income would be presumed to be 8% of the total turnover of the assessee, only if the total turnover of the aeeessee is less than 2 Crore. In case the total turnover of the assessee is more than Rs 2 crore, income would be computed as per the normal provisions of the income tax act . (i.e. Revenue - expence - Depreciation ) and the assessee would also be required to get his accounts audited under section 44 AB.

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Sheetal Jain (.) (894 Points)
Replied 12 January 2018

Yes,he can voluntarily declared his business income u/s 44 AD more than 8/6%,no further additional requirement

Refer the link

https://www.incometaxindia.gov.in/tutorials/13.%20tax%20on%20presumptive%20basis%20in%20case%20of%20certain%20eligible%20businesses.pdf

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 12 January 2018

Yes...
He can avail the benefit as per sec 44AD... No more restriction...

Ajita Parouha (CA) (79 Points)
Replied 12 January 2018

Yes i know the provision condition of Rs 2 Crore but i am asking can declare more than 6/8%, (say 15%), but in actual income may be greater than 15% of turnover also... Can he do so???

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 12 January 2018

Yes... You can show 8% if your profit above 8 percentage ...

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Ajita Parouha (CA) (79 Points)
Replied 12 January 2018

Thanks.. Means no complications will be there if assess wants to take benefit of sec 44AD and declare his income @ 15% (not 6/8%) of turnover and actual income may be higher than declared income even. Later on can AO ask the sources of income and questioned for not paying the tax on actual income..

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 12 January 2018

Yes... Exactly...

In above section we ll show the profit 8 percent is must. Also we can show the profit above 8%/6% no more restriction as per sec 44AD and the section says the same way....

Ajita Parouha (CA) (79 Points)
Replied 12 January 2018

Thanks for the reply...But doubt is that , in one of the return processed under 143(1) for sec 44AD and 44AE there is written tax >/= 50% of turnover and >/= Rs 7500 respectively. But in the same format for 44AD, tax = 6/8% no greater than sign mentioned there for AY 17-18. However till AY 16-17 greater than sign was there for sec 44AD also. And one of the consultant suggested that it would be safe side to declare the income at exact rate (6/8%) instead of higher...Since if we do the higher declaration AO can ask for the sources of income and for non payment of tax on such income.. In my opinion AO can not ask any question when we are taking the benefit of sec 44AD until turnover is go excess by 2 Crore though how much excess is our actual profit..