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Itr 4s

Kapil Rao (CA Final MCOM (Accountancy)) (804 Points)

19 June 2012

Under sec 44ad The assessee can voluntarily declare a higher income in his return than 8 %. But which ITR to use ITR 4 or ITR 4s in case assessee wants to disclose more than 8% of gross receipts ?????

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10 Replies

NiTiN JAiN (TAX CONSULTANT & CA FINAL STUDENT) (155 Points)
Replied 19 June 2012

According to me If you want to declare higher profits then also you should go for ITR 4S.

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KARANDEEP,CA,B.Com,CS FNL (JOB) (457 Points)
Replied 19 June 2012

Form ITR 4S.

for further knowledge:

A new section 44AD has been incorporated in the Income-tax Act to provide for special provisions for computing business profit on presumptive basis from the assessment year 2011-12. This section has been inserted to replace existing section 44AD and 44AF and this new section will be applicable to any business (whether it is retail trade or civil construction or any other business) except the business of plying, hiring or leasing goods carriages referred u/s 44AE.

The provisions of section 44AD will be applicable only if the following conditions are satisfied:

Eligible Assessee

The assessee should be an eligible assessee. Eligible assessee for this purpose is a person resident in India who is an Individual, a Hindu Undivided Family or a partnership firm (not being a limited liability firm). The assessee has not claimed any deduction under sections 10A, 10AA, 10B, 10BA, 80HH to 80RRB in the relevant assessment year.

Eligible Business

The assessee should be engaged in any business except the business of plying, hiring or leasing goods carriages referred u/s 44AE.

Turnover

Total turnover or gross receipt in the previous year of the eligible business should not exceed an amount of rupees sixty lakhs.

Consequences if the above conditions are satisfied

If the above conditions are satisfied, the income from the eligible business is estimated at 8% of the gross receipt or total turnover.

Following points should be noted –

* The assessee can voluntarily declare a higher income in his return.

* All deductions under sections 30 to 38, including depreciation and unabsorbed depreciation, shall be assumed to have already been given full effect. No further deduction shall be allowed under these sections.

* However, in the case of assessee being firm, the normal deduction in respect of salary and interest paid to the partners shall be allowed as deduction out of such presumptive income subject to conditions and limits specified in clause (b) of section 40.

* The written down value of is calculated, where necessary, as if depreciation as applicable has been allowed. Moreover, it will be assumed that disallowance, if any, under sections 40, 40A and 43B has been considered while calculating the estimated income @ 8 %.

* An assessee opting for the above scheme shall be exempted from payment of advance tax related to such business.

* An assessee opting for the above scheme shall be exempted from maintenance of books of account related to such business as required under section 44AA.

* When income is taxable at the rate of 8% as stated above, the concerned assessee is not under any obligation to explain individual entry of cash deposit in his bank, unless such entry has no nexus with the gross receipt.

Lower Income and consequences

A taxpayer can declare his income to be lower than the deemed profits and gains as stated above. The following consequences are applicable if the taxpayer declares his income which is lower than the deemed profits and gains as stated above –

1. The taxpayer will have to maintain the books of account and other documents as required under section 44AA (irrespective of income or turnover) if his total income exceeds the exemption limit.

2. The taxpayer will have to get his books of accounts audited and furnish a report of such audit under section 44AB (irrespective of income or turnover) if his total income exceeds the exemption limit.

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Kapil Rao (CA Final MCOM (Accountancy)) (804 Points)
Replied 19 June 2012

But my software is taking exactly 8 % of gross receipts. what to do ?

(Guest)

contact your software provider. you should use itr4s only.

1 Like

srinivass (CA Final) (2466 Points)
Replied 20 June 2012

Thanks Karan Sir fpr ur great sharing

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srinivass (CA Final) (2466 Points)
Replied 20 June 2012

any one here can tell me

FOR INSURANCE COMMISION itr4 or itr4s or itr2

(Guest)

Amendment of section 44AD.

14. In section 44AD of the Income-tax Act,—

(a) after sub-section (5), and before the Explanation, the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2011, namely:—

"(6) The provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to—

(i) a person carrying on profession as referred to in sub-section (1) of section 44AA;

(ii) a person earning income in the nature of commission or brokerage; or

(iii) a person carrying on any agency business.";

(b) in the Explanation, in clause (b), in sub-clause (ii), for the words "sixty lakh rupees", the words "one crore rupees" shall be substituted with effect from the 1st day of April, 2013.

hence you cannot use itr4s. itr2 doesnt allow us to give details of business and profession. hence you shoul use itr4.