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Labour charges under 44ad

Dimple Kotak (Accounts & Tax ) (185 Points)

14 March 2013

Please advice me whether I can show labour charges (Repair Charges, etc.) received under Presumtive taxation u/s 44AD.

Whther Tution fees received can be shown u/s 44AD?

Kindly help as soon as possible.

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Hemant (CS) (33 Points)
Replied 14 March 2013

Any business except plying, hiring or leasing goods carriages referred in S. 44AE and whose turnover is less than Rs. 1 crore during the previous year.

Presumptive or estimated income: Sum equal to 8% of the total turnover or gross receipt of the assessee.

if u are not maintaing books of accounts simply u have to pay 8 % of the turnover.

Here are some important points which one should consider while opting for section 44AD:

No deduction of expenses incurred to earn income is allowed.
Books of account is not required to maintain if income is shown 8% or More than 8% of gross receipt but the onus of proof of income remains with assessee, so it is advisable to retain invoices or cheques etc.
In case assessee who wants to show income less than 8%, books of account is necessary to maintain and the account should be audited u/s 44AB.
Deduction u/s 80C to 80U is allowed.
Loss can also be carried forward to next year upto maximum of 8 years.