Query regarding presumptive profits u/s 44ad

Hi, as per the provision of section 44ad , since the turnover does not exceed Rs 60,00,000 you are eligible for presumptive taxation and can pay tax at the rate of 8% . And also you need not to maintain books of accounts as section 44AA does apply when section 44ad applies . 

Also when your income is less than that of 8% of turnover you need to maintain the books of accounts and get the tax audit done . 

Originally posted by : SHASHANK GOYAL
	Hi, as per the provision of section 44ad , since the turnover does not exceed60,00,000 you are eligible for presumptive taxation and can pay tax at the rate of 8% . And also you need not to maintain books of accounts as section 44AA does apply when section 44ad applies .  Also when your income is less than that of 8% of turnover you need to maintain the books of accounts and get the tax audit done .

agree

as per sec 44 AD , if tournover not exceed 60 lacks, then he is eligible to show 8% income on tournover, and pay tax on that income( normal tax rates applicable), there is no special tax rates applicable for income shown as per sec 44AD.he is eligible to claim deductions  other than income based deduction( 80IA , 80Ib.......etc

         however if dealer is of the opinion that his income is below 8% of the tournover, then he must maintained books of accounts as per sec 44AA, and must get his accounts audited as per sec 44AB.

yes.sec 44AD applicable to individual , huf and firm

DEAR SIR, WITH RESPECT TO YOUR QUERY .......PLEASE READ FOLLOWING EXTRACT OF SEC-44AD WITH EXPLANATION.........

SECTION - 44AD(5) : READ AS FOLLOWS -

Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB

EXPLAINATION :-

 The assessee is bound to get the books of accounts audited, if the following two conditions are satisfied:-

 1. His profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) i.e. his net profit is lower than 8% of turnover. 

and 

2    Whose total income exceeds the maximum amount which is not chargeable to income-tax. 

CONCLUSION :- Here see both the conditions are simultaneous and the assessee required to get his accounts audit only and only if his profits from the business u/s 44AD are lower than 8% of this turnover and further his total income is more than maximum amount which is not liable to tax.

Mr Pathan is absolutely right

An assessee with turnover below60 lakhs, who shows an income below the presumptive rate prescribed under these provisions, in case his total income exceeds the taxable limit, required to maintain books of accounts and also get them audited.

8% of gross receipts is treated as a profit & gain from such business.

Dear Sir, 

That means some one has turnover below 60 lacs (say 55 lacs) and if he has invested Rs. 1,20,000/- u/s 80 c and 80 ccc.

The he can show his income up to 2.80 lacs (1.60+1.20) without maintaining books and audit. even though his income is below 8% of turnover.

Because of his total income is below the exemption limt.

AM I RIGHT SIR

CA. Narendra Kothari

Mob. 94250-57143

Email : kothari3333 @ yahoo.com