Sec 44ad

Page no : 2

C.A SUVAJIT SAHU (CA ( In Practice )) (708 Points)
Replied 19 October 2012

Originally posted by : Nirmit Choraria
	Thanks every one for you views and answer.. Now what if I have profit of below 8% but i dont get my books of account audited and just file my return what can be the consequnces faced...????

if books of acounts are not audited
if you would declare a higher sum in your return ( higher than 8% return) then you would have to pay tax on such higher sum.

if you would declare a lower sum in your return ( lower than 8% return) then you would have to pay tax on presumptive basis.

THANKS

SUVAJIT

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Nirmit Choraria (CA Final) (1333 Points)
Replied 20 October 2012

@ SUVAJIT SAHU

I dont use the 8% presumtive income my turnover is 45lac and profit is 4% and i file ITR4 but dont prepare an Audit report nor have a keep any books of account then..

what can be the consequences i have to face...???

C.A SUVAJIT SAHU (CA ( In Practice )) (708 Points)
Replied 20 October 2012

hi nirmit ........

it's not about 8% or 4% , it's all about quantum of profit

suppose your turnover is 45 lacs and net profit comes out to be 250000 but 8% on 45 lacs is 360000(net profit as per presumptive taxation assuming all expenses are allowed) .

now if books of accounts are audited

you can go with 250000.

if books of accounts are not audited.

you have to pay taxes on 360000

case 1 ---if you have shown net profit of 380000 in ROI.

then you have to pay taxes on 380000.( A.O will presume 380000 is your correct net profit and you have not opted for presumptive taxation, as sec 44ad is not a mandatory presumptive taxation scheme)

case 2-- if you have shown net profit 320000.

you have to pay taxes on 360000.

crux- law is drafted in such a way to ensure that there is no scope of revenue loss to the department in any situation.

THANKS,

SUVAJIT

Nirmit Choraria (CA Final) (1333 Points)
Replied 20 October 2012

@ SUVAJIT

What you say is completely corect what if i show my profit and file my return...

AO will make this out when he calls my case in Assessment order or Scrutiny till that time i am safe

Sonu Kumar (Account Manager) (665 Points)
Replied 20 October 2012

for more Clearence Kindly Go through the Attachment

1 Like

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Sonu Kumar (Account Manager) (665 Points)
Replied 20 October 2012

Find Attachment

Attached File : 781816 1074189 it 44ad.doc downloaded: 263 times

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Nirmit Choraria (CA Final) (1333 Points)
Replied 20 October 2012

Thank you sit for such a gr8 presentation of Sec 44AD...

Thanks a lot..

Keep sharing such thing for students...

Vinay Ramgoniwar (CA Final) (36 Points)
Replied 22 October 2012

You may receive a notice u/s 143(2) for regular assessment for non compliance of the section and declaring lower income than which is deemed u/s 44AD.

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Sec 44ad

if books of acounts are not audited
if you would declare a higher sum in your return ( higher than 8% return) then you would have to pay tax on such higher sum.