Presumptive Taxation

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How the turnover of sec 44AD is determined where no books is determined ?How it will be assured because he may declare low turnover than actual because no tax Audit is there.

Replies (11)

Good question, even I am thnninking about it now.

The only source of information is the GST returns filed by the Assessee. Further, the total amounts received in your current account can also be taken as your sales receipt. 

Other than these there are no such sources from where one can check if there is under statement of business income. 

yeah thanks a lot
person who opt 44ad has to file ITR 4. wherein certain information. is mandatory like Sundry creditors , debtors , cash ,bank and stock so he has to maintain. books for this purpose .
the assessee requires to maintain books so as to enable the AO to compute the total turnover
@ NANDHU.,

It's not "No Books of Accounts".
It's "No need REGULAR Books of Accounts".

(Dear it's only my view)
I fully concur with your reply Mr. Raja

Need not to maintain books means you need not to maintain books as per the Income-tax Act which is you don't have any Legal Liability for this. Also even if it is presumption business and also where there is NO REGISTRATION UNDER GST (i.e Under 20L case) but this is A BUSINESS anyway which means there must be transactions and it must have been recorded as well on the basis of which you are supposed to file the return.

This means if even you record the transaction on a simple Register (like Local Baniyas do) and file the return on basis of it, it would be sufficient compliance. Further, in general AO does not ask for the Books (only except in cases when he has reason to believe that Income has hidden or underreported etc.) So one need not to be very much worried about maintenance of PROPER BOOKS what is required is just you record the transaction on basis of which you are Presuming your Income. 

 

@ nitesh have you gone through the contents of 143(2) notice? it will read something like this, the details, books and documents based on which you have filed your Return Of income.

one more thing, in order to claim presumptive taxation first of all one has to prove that his business is an eligible business. moreover it's not enough to show some hand written books. the first and foremost thing to prove is that the total turnover reported in the ITR, is out of his sale proceeds with supporting documents.

suppose, as you said if I have total receipts of 1 cr on sale of various plots at different areas which were held as capital asset and not as stock in trade, do you think whether it's enough for me to just show 8 lakhs as my total income under 44ad on the pretext of not maintaining any books
In my view ,the 8 lakhs is your net profit not total income and thanks a lot . now i got good clarity in this topic

Rama krishnan you cant show 8 lakhs as your total income, you have to show 1 cr as your total income and 8% of the same i.e Rs. 8 lakhs will be taken as your net profit. However you can show more than 8% if you wish.


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