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Sec 44ae

Hemraj Charan (Article Assistent) (98 Points)

28 November 2012

Hello friends! I want to know if i have some income u/s44ae (income from trucks on presumptive basis )and some other .I have to show trucks on wdv then what is provoision under income tax act ?Please guide me. What would be the accounting treatment regarding the same...journal entry?

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DrSANGITA PHD MBA(usa)CACSCWA (President Finance & Taxation) (405 Points)
Replied 28 November 2012

Value of trucks in Your Balanec sheet can be shown at WDV but such depreciation cannot be allowed as an expense from your Income as calculated under the provision of sec 44AE

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satish kumar voleti (A.C.A., (ICWAI)) (1686 Points)
Replied 28 November 2012

Business of plying, leasing or hiring trucks – Section 44AE

1] Applies to:

Any person engaged in the business of plying, leasing or hiring of trucks if he owns not more than 10 goods carriages at any time during the previous year including those taken on hire purchase or on instalments. This scheme does not apply to those who operate trucks on hire without owning them (Circular 684, dt. 10-6-1994)

2] Deemed Income:

*Type of Goods Carriage*	*Estimated Income*
Heavy Goods Vehicle	Higher of Rs. 5,000 for every month (or part of a month) during which the goods carriage is owned by the tax-payer or an amount actually earned from such vehicle.
Other than Heavy goods vehicle	Higher of Rs. 4,500 for every month (or part of a month) during which the goods carriage is owned by the tax-payer or an amount actually earned from such vehicle.

section 28 to 44d will not apply... if your are ccomputing your income on the basis of 44AE....

however if in any year you wish to compute income under normal provisions of the income tax then, depreciation is to be calculated as if provisions of section 32 applies....

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Pulkesh Mehta (Chartered Accountant) (243 Points)
Replied 28 November 2012

Depreciation & WDV will be calculated as if Section 44AE has not been opted by assessee i.e according to normal provisions.

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CA LOVELY ARORA (C.A. B.Com (H) Graduate) (2151 Points)
Replied 28 November 2012

agree with all above... Depreciation would be allowed at time of assessment proceedings... even though it couldn't be claimed by the assessee in its ROI....

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