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Presumptive taxation

CA Pratik Dharod (Bussiness) (178 Points)

01 December 2017

if someone is trading in F&O on regular basis and he has turnover of around 50 Lacs and has actual profit of 10 lacs.

Now my question is, can he file return U/S 44AD and show profit of 8% and avoid extra burden of tax ? as Act itself allow us to show profit of 8% if turnover is below 2 Crore.

Any case law for referance?

I have calculated turnover on the basis of sum of all debits and credits in my ledger account.

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5 Replies

Neha Mittal (240 Points)
Replied 01 December 2017

yes u can show under 44ad..

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Gokul Chandran (B.Com) (32 Points)
Replied 01 December 2017

44ad for whom?
Individual,HUF,Firm(except LLP),Other than export oriented business.

Eligible Business
All business except for assessee carrying on,
-agency business
-income from brokerage/commission
-other business which falls in 44AB

Presumptive Income to be shown-
8%or higher sum on the turnover
(in case when assessee declares lower income he needs to carry on 44ab tax audit (44aa applies for professionals - maintenance of books of accounts)

Deductions and Disallowances-
All the deductions (sec 36)& Disallowances (sec 40)DEEMED to be allowed.

Partners Salary and Interest on Capital are not to be included (i.e it should not be deducted from Profit)

Turnover Limit-
44ad is not applicable if the turnover exceeds Rs 2 Cr in the previous financial year.

The assessee is required to follow and declare income as per 44ad provision
for 5 years

1 Like

CA Pratik Dharod (Bussiness) (178 Points)
Replied 02 December 2017

Originally posted by : Gokul Chandran
	44ad for whom?Individual,HUF,Firm(except LLP),Other than export oriented business.Eligible BusinessAll business except for assessee carrying on,-agency business-income from brokerage/commission-other business which falls in 44ABPresumptive Income to be shown-8%or higher sum on the turnover(in case when assessee declares lower income he needs to carry on 44ab tax audit (44aa applies for professionals - maintenance of books of accounts)Deductions and Disallowances-All the deductions (sec 36)& Disallowances (sec 40)DEEMED to be allowed.Partners Salary and Interest on Capital are not to be included (i.e it should not be deducted from Profit)Turnover Limit-44ad is not applicable if the turnover exceeds Rs 2 Cr in the previous financial year.The assessee is required to follow and declare income as per 44ad provisionfor 5 years

Assessee is individual.

I know what 44AD provision is. i just want to know weather i can show 8% profit even if my profit is 20%.

kindly give case law referance as provision is not clear on this matter.

Neha Mittal (240 Points)
Replied 02 December 2017

yes u can do that bcz books of accounts are not mandatory to be prepare if u are opting 44ad and actual profit doesn't matter. min profit should be 8%

CA Pratik Dharod (Bussiness) (178 Points)
Replied 02 December 2017

Originally posted by : Neha Mittal
	yes u can do that bcz books of accounts are not mandatory to be prepare if u are opting 44ad and actual profit doesn't matter. min profit should be 8%

Thanks.