(i) Proposed Amendment
In section 44AD of the Income-tax Act [as amended by section 20 of the Finance (No.2) Act, 2009], in the Explanation, in clause (b), in sub-clause (ii), for the words “forty lakh rupees”, the words “sixty lakh rupees” shall be substituted with effect from the 1st day of April, 2011.
(ii) From Notes on Clauses
Clause 15 of the Bill seeks to amend section 44AD of the Income-tax Act relating to special provision for computing profits and gains of business on presumptive basis.
The existing sub-clause (ii) of clause (b) of the Explanation to the aforesaid section defines the term “eligible business” to mean any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE and whose total turnover or gross receipts in previous year does not exceed forty lakh rupees for the purpose of computing profits and gains of business on presumptive basis.
It is proposed to enhance the said limit from forty lakh rupees to sixty lakh rupees.
This amendment will take effect from 1st April, 2011, and will, accordingly, apply in relation to the assessment year 2011-2012 and subsequent years.
(iii) From Explanatory Memorandum
C. It is also proposed that for the purpose of presumptive taxation under section 44AD, the threshold limit of total turnover or gross receipts would be increased from forty lakh rupees to sixty lakh rupees.
These amendments are proposed to take effect from 1st April, 2011 and will, accordingly, apply in relation to the assessment year 2011-12 and subsequent years.
(iv) Effect of the amendment
- Under the existing provisions of section 44AD of the Act, a person carrying on any business is entitled to opt for a scheme of presumptive tax scheme, provided its turnover or gross receipts do not exceed Rs. 40.00 lacs. In such type of assessees, the assessee is required to presume its income at 8% of the turnover or gross receipts and pay tax accordingly.
- It is proposed to expand the scope of the said presumptive tax scheme to the assessees having its turnover or gross receipts upto Rs. 60.00 lacs. This would help the smaller businessman to reduce their hassles of compliance.
my profit is less than 8 % of the total turnover, and my turnover is less than lacs, iam not opting for the scheme u/s 44ad , and keeping the books of accounts and filing return under form no . 4 , whether it is necessary to get book audited u/s.44ab. pl guide , tks
soni sabnani
9867759886
@M.D.Pinjar
44AE has been amended w.e.f. FY 09-10, i.e. in your case now income from Heavy goods vehicle is estimated to Rs.5000 for every month/vehicle.
Thus your total income would be Rs.120,000
In case you opt for presumptive taxation @ 8%, you need not maintain books of accounts.
You need not submit IT returns if this is the only source of income, as then your total income does not exceed the maximum amount which is not chargeable to income-tax
I own 2 Heavy Goods vehicles, no other income, and I am plying them on National Permit on almost 4 States, & I am paying Road Taxes, NP permit Tax etc regularly.
I want to opt for presumptive taxation. According to Section 44AE, income from Heavy goods vehicle is estimated to Rs.3500 for every month/vehicle.
Therefore my total income will be Rs.3500*2 vehicles= 7000Rs*12 Months = 84,000Rs.
I am having PAN card also
Therefore my question is.,
1] I need not maintain books of accounts?
2] I need not submit IT returns as my income is less than Taxable income?
3] If I need to submit IT return, in which form[form no] i have to submit & how to mention “opt for presumptive taxation”.
Please guide me with other required IT measures & procedures to my Business.
The provision says “An assessee with turnover below Rs 40 lakhs, who shows an income below the presumptive rate prescribed under these provisions, will, in case his total income exceeds the taxable limit, be required to maintain books of accounts and also get them audited.”
Hence any business having income @30% which is above presumptive rate, need not maintain books.
skg_akoli@hotmail.com
What happens if the income is more than 8% of receipts? (For example if the profit is about 30% of the receipts) Can the business opt for presumptive taxation? Does he need to maintain books of accounts?