Sponsored
    Follow Us:
Sponsored

♦ Existing Section 44AD of Income Tax Act, 1961

√ It is a presumptive income scheme for small businesses.

√ Applicable to-

Resident – Individual, HUF & Partnership Firm

Gross Turnover or receipt of two crore rupees or less.

√ Minimum sum to be taxable- 8 % or 6 % of the Turnover or gross receipts is deemed to be the profits and gains from business subject to certain conditions.

√ We all know that 6 % rate applicable only in case of digital transactions i.e turnover/gross receipt is received by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed.

√ However, Assessee may disclose his business income at more than 8% or 6%, as the case may be, of turnover or gross receipt.

♦ Proposed Amendment in Section 44AD of Income Tax Act, 1961 vide Union Budget 2023

> Threshold limit -Gross Turnover or receipts of two crore rupees increased to Rs three crore rupees but with a condition- 

Aggregate of amount received in cash, does not exceed five percent of the total turnover or gross receipts.

Existing Section 44ADA of Income Tax Act, 1961

√ It is a presumptive income scheme for small professionals.

√ Applicable to-

Resident – Individual, HUF & Partnership Firm

Gross receipts in a profession does not exceed Rs 50 lacs in a previous year

√ Minimum sum to be taxable- sum equal to 50 % of gross receipts is deemed to profits and gains from business.

√ However, Assessee may disclose his business income at higher sum than 50 %, then that higher sum is taxable.

Proposed Amendment in Section 44ADA of Income Tax Act, 1961 vide Union Budget 2023

> Threshold limit –Receipts from a profession increased to Rs seventy –five lakh rupees but with a condition-

Aggregate of amount received in cash, does not exceed five percent of the gross receipts.

These proposed amendments will take effect from 01st April 2024 and will accordingly apply to the assessment year 2024-2025 and subsequent assessment years.

Sponsored

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Sponsored
Sponsored
Sponsored
Search Post by Date
October 2024
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
28293031