Hello
I need clarification rrgarding real and deemed income as per Sec 44AD of IT Act.
Since no books of accounts need to be maintained if turnover is Rs 2 Crore or less and 8% is deemed as income and tax is paid accordingly, i need clarification with the below mentioned points:
1) How will books of account be maintained if real income is, say 20% can the assessee only pay taxes on deemed income 8%?
2) Since no books of accounts needs to be maintained how is real income shown in the books wiz the deemed income? Will the accounts be maintained taking 8% income or real income 20%?
Example:
Sales - Rs 1.5 Crores
Real Income - Rs 30 lakhs
Deemed Income u/s Sec 44AD - 8% of Rs 1.5 Crores = Rs 12 Lakhs.
Tax on Deemed Income if Assessee is a Firm - 30.9% of Rs 12 Lakhs = Rs 3.7 Lakhs
So what will be the distribtabe profits for partners if Presumptive Taxation is followed?
Regards
CAclubindia
