sumanjan (Article Assistant) (44 Points)
27 July 2014Dear Sir/Madam,
A partnership firm's total turnover 24,00,000
all exp.excluding partners rem. & interest=22,01,209
Rem.& Interest (for 2 partners)=4,11,000
Net loss=2,12,209
The firm mainten its accounts.
please guid me now here sec.44ad is aplied,is audit is compulsorry.
is if 44ad aplied, presumption profit 2400000*8%=192000.
is this 192000,on which we paid tax or we reduce the partners rem. & int. considering this amount as book profit.
please sir clear it.
NILA REJESH P
(Chartered Accountant)
(815 Points)
Replied 27 July 2014
Under Section 44AD, income would be presumed to be 8% of the total turnover of the assessee, only if the total turnover of the assessee is less than Rs. 1 Crore. Remuneration or interest paid to partners shall be allowed as deduction from the income computed under this section. The assessee may choose not to opt for the scheme and may declare an income lower than 8% of the gross receipts. However in such a case, the assessee shall have to keep and maintain books of accounts and get his accounts audited by a chartered accountant.
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