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Regarding itr5

S sharma (30 Points)

28 June 2018

in itr5 partnership firm if books of accounts are not maintain it is mandatory to prepare profit and loss account and balance sheet or not .

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185602 Points)
Replied 28 June 2018

Not mandatory....

If applicable; file ITR 4..... for no account case ....

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S sharma (30 Points)
Replied 28 June 2018

sir ,kindly tell me about ITR 4

RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 28 June 2018

ITR 4 is Presumptive taxation scheme... If You are not have books of accounts then You can file ITR 4 without books of accounts and
Show profit 8 percentage (if eligible business).

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rama krishnan (12244 Points)
Replied 29 June 2018

many of us have wrong perception about maintenance of books of accounts. if the conditions met out as prescribed under section 44AA, the assessee must maintain books of accounts. only for the purpose of filing ROI under presumptive taxation, it's not necessary to enter the details of books of accounts. I welcome experts view in this regard for a healthy academic discussion

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185602 Points)
Replied 29 June 2018

" sir ,kindly tell me about ITR 4"

Who can use this Return Form ITR4 for AY 2018-19........

This Return Form is to be used by an individual/ HUF/ Partnership Firm whose total income for the assessment year 2018-19 includes:-

(a) Business income where such income is computed in accordance with special provisions referred to in sections 44AD and 44AE of the Act for computation of business income; or

(b) Income from Profession where such income is computed in accordance with special provisions referred to in sections 44ADA; or

(d) Income from One House Property (excluding cases where there is brought forward loss or loss to be carried forward under this head); or

(e ) Income from Other Sources (excluding Winning from Lottery and Income from Race Horses).

Refer:: ITR2018/Instructions/Instruction_ITR4

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185602 Points)
Replied 29 June 2018

Provisions relating to maintenance of books of account

The scheme gives a great relief to the assessee in respect of maintenance of books of account.

An assessee, who adopts the provisions of section 44AD, is not required to maintain books of account as per section 44AA (applicable only for business covered by this section).

Further, in respect of such business, the provisions of section 44AB (relating to audit) are also not applicable.

Thus, the scheme relieves the assessee from the maintenance of regular books of account. Apart from giving relief from maintenance of books of account, the scheme also relieves the assessee from audit of books of account.

REFER::: Tutorials/Section-44AD-Theory.

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rama krishnan (12244 Points)
Replied 29 June 2018

An assessee, who adopts the provisions of section 44AD, is not required to maintain books of account as per section 44AA (applicable only for business covered by this section).

where it's said that maintenance of books are not mandatory for 44AD assessees...

please clarify

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185602 Points)
Replied 29 June 2018

If a person adopts the presumptive taxation scheme of section 44AD, then is he required to maintain books of account as per section 44AA?

Section 44AA deals with provisions relating to maintenance of books of account by a person engaged in business/profession. Thus, a person engaged in business/profession has to maintain books of account of his business/profession according to the provisions of section 44AA.

In case of a person engaged in a business and opting for the presumptive taxation scheme of section 44AD, the provisions of section 44AA relating to maintenance of books of account will not apply. In other words, if a person adopts the provisions of section 44AD and declares income @ 8%/6% of the turnover, then he is not required to maintain the books of account as provided under section 44AA in respect of business covered under the presumptive taxation scheme of section 44AD

From:: FAQs+on+Tax+on+Presumptive+Taxation

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rama krishnan (12244 Points)
Replied 29 June 2018

In case of a person engaged in a business and opting for the presumptive taxation scheme of section 44AD, the provisions of section 44AA relating to maintenance of books of account will not apply

where in the act it's mentioned? please post the relevant clause of the sections

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185602 Points)
Replied 29 June 2018

Originally posted by : rama krishnan
	In case of a person engaged in a business and opting for the presumptive taxation scheme of section 44AD, the provisions of section 44AA relating to maintenance of books of account will not applywhere in the act it's mentioned? please post the relevant clause of the sections

As an answerable authority of Income tax department, also being a responsible ITO...... will you please reply the query....... with the relevant clause of the section?

If it is not incorporated in the section, then why the FAQ and TUTORIALS published by IT Department state otherwise? Are they published against act?

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S ELAVARASI (ACCOUNTANT) (2975 Points)
Replied 29 June 2018

Mr. Dhorajlal Rambhia Sir.,

Thenk You for the Detailed explanation and the Updates Sir...

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S ELAVARASI (ACCOUNTANT) (2975 Points)
Replied 29 June 2018

I have one doubt.,

If a asseseee Have Fixed Asset like Rs. 5 lakhs... If he opt u/s 44AA then he book depareciation @ 10% (Example) and the Value less Rs. 50k balance Rs. 4.50k c/f to next FY... Also he get continuosly and the Asset value is reduced...

But.,

If he opt u/s 44AD then what is the exact value of the Fixed Asset to next year and another one next year...

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185602 Points)
Replied 29 June 2018

@ S ELAVARASI ..... " If he opt u/s 44AD then what is the exact value of the Fixed Asset to next year and another one next year.."

Same treatment, only thing is in regular assessment the depreciation gets debited to P&L acc. while here the asset just gets reduced to its depreciated value without any adjustment. (i.e. Deemed adjuatment)

As per subsection 44AD(3) .... "The written down value of any asset of an eligible business shall be deemed to have been calculated as if the eligible assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years."