Article discusses about Meaning of presumptive taxation scheme, Presumptive Taxation Scheme of Section 44AD, Section 44ADA, Section 44AE, For whom the presumptive taxation scheme of is designed?, Businesses not covered under the presumptive taxation scheme, No need to maintain books of account as prescribed under section 44AA, Eligible taxpayer and eligible business for the purpose of the presumptive taxation scheme.
To give relief to small taxpayers from the tedious job of maintenance of books of account and from getting the accounts audited, the Income-tax Act has framed the presumptive taxation scheme under sections 44AD, section 44ADA and section 44AE. In this part you can gain knowledge about various provisions of the presumptive taxation scheme of section 44AD, section 44ADA and section 44AE.
Meaning of presumptive taxation scheme
As per the Income-tax Act, a person engaged in business or profession is required to maintain regular books of account and further, he has to get his accounts audited. To give relief to small taxpayers from this tedious work, the Income-tax Act has framed the presumptive taxation scheme under sections 44AD, 44ADA and 44AE.
A person adopting the presumptive taxation scheme can declare income at a prescribed rate and, in turn, is relieved from tedious job of maintenance of books of account and also from getting the accounts audited.
Meaning of presumptive taxation scheme
For small taxpayers the Income-tax Act has framed two presumptive taxation schemes as given below:
1) The presumptive taxation scheme of section 44AD.
2) The presumptive taxation scheme of section 44ADA.
3) The presumptive taxation scheme of section 44AE.
Presumptive Taxation Scheme of Section 44AD
For whom the presumptive taxation scheme of section 44AD is designed?
The presumptive taxation scheme of section 44AD is designed to give relief to small taxpayers engaged in any business (except the business of plying, hiring or leasing of goods carriages referred to in section 44AE).
The presumptive taxation scheme of section 44AD can be adopted by following persons :
1) Resident Individual
2) Resident Hindu Undivided Family
3) Resident Partnership Firm (not Limited Liability Partnership Firm)
In other words, the scheme cannot be adopted by a non-resident and by any person other than an individual, a HUF or a partnership firm (not Limited Liability Partnership Firm).
This scheme cannot be adopted by a person who has made any claim towards deductions under section 10A/10AA/10B/10BA or under sections 80HH to 80RRB in the relevant year.
Businesses not covered under the presumptive taxation scheme of section 44AD
The scheme of section 44AD is designed to give relief to small taxpayers engaged in any business, except the following businesses:
> Business of plying, hiring or leasing of goods carriages referred to in section 44AE.
> A person who is carrying on any agency business.
> A person who is earning income in the nature of commission or brokerage
Apart from above discussed businesses, a person carrying on profession as referred to in section 44AA(1)is not eligible for presumptive taxation scheme.
An insurance agent cannot adopt the presumptive taxation scheme of section 44AD
A person who is earning income in the nature of commission or brokerage cannot adopt the presumptive taxation scheme of section 44AD. Insurance agents earn income by way of commission and, hence, they cannot adopt the presumptive taxation scheme of section 44AD.
A person engaged in a profession as prescribed under section 44AA(1) cannot adopt the presumptive taxation scheme of section 44AD
A person who is engaged in any profession as prescribed under section 44AA(1) cannot adopt the presumptive taxation scheme of section 44AD.
A person whose total turnover or gross receipts for the year exceed Rs. 2,00,00,000 cannot adopt the presumptive taxation scheme of section 44AD
The presumptive taxation scheme of section 44AD can be opted by the eligible persons, if the total turnover or gross receipts from the business do not exceed Rs. 2,00,00,000. In other words, if the total turnover or gross receipt of the business exceeds Rs. 2,00,00,000 then the scheme of section 44AD cannot be adopted.
Manner of computation of taxable business income under the normal provisions of the Income-tax Act, i.e., in case of a person not adopting the presumptive taxation scheme of section 44AD
Generally, as per the Income-tax Act, the taxable business income of every person is computed as follows:
| Particulars | Amount |
| Turnover or gross receipts from the business | XXXXX |
| Less : Expenses incurred in relation to earning of the income | (XXXXX) |
| Taxable Business Income | XXXXX |
Manner of computation of taxable business income under the normal provisions of the Income-tax Act, i.e., in case of a person not adopting the presumptive taxation scheme of section 44AD
For the purpose of computing taxable business income in the above manner, the taxpayers have to maintain books of account of the business. Income will be computed on the basis of the information revealed in the books of account.
The manner of computation of taxable business income in case of a person adopting the presumptive taxation scheme of section 44AD
In case of a person adopting the provisions of section 44AD, income is computed on presumptive basis at the rate of 8% of the turnover or gross receipts of the eligible business for the year.
In order to promote digital transactions and to encourage small unorganized business to accept digital payments, section 44AD is amended with effect from the assessment year 2017-18 to provide that income shall be computed at the rate of 6% instead of 8% if 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 during the previous year or before the due date of filing of return under section 139(1).
Hence, in case of a person adopting the provisions of section 44AD, income will not be computed in normal manner as discussed earlier (i.e., Turnover less Expenses) but will be computed @ 6% or 8%, as the case may be, of the turnover or gross receipt.
However, a person may voluntarily disclose his business income at more than 8% or 6%, as the case may be, of turnover or gross receipt.
The presumptive income computed as per the prescribed rate is the final income and no further expenses will be allowed or disallowed
Under the normal provisions of the Income-tax Act, taxable business income will be computed after allowing deduction in respect of expenses which are deductible as per the Income-tax Act and after disallowing expenses which are not deductible as per the Income-tax Act.
In case of a person who is opting for the presumptive taxation scheme of section 44AD, the provisions of allowance/disallowances as provided for under the Income-tax Act will not apply and income computed at the presumptive rate of 6% or 8% will be the final taxable income of the business covered under the presumptive taxation scheme. In other words, the income computed as per the prescribed rate will be the final taxable income of the business covered under the presumptive taxation scheme and no further expenses will be allowed or disallowed.
While computing income as per the provisions of section 44AD, separate deduction on account of depreciation is not available. However, the written down value of any asset used in such business shall be calculated as if depreciation as per section 32 is claimed and has been actually allowed.
No need to maintain books of account as prescribed under section 44AA
Section 44AA deals with provisions relating to maintenance of books of account by a person engaged in business/profession. Thus, a person engaged in business/profession has to maintain books of account of his business/profession according to the provisions of section 44AA.
In case of a person engaged in a business and opting for the presumptive taxation scheme of section 44AD, the provisions of section 44AA relating to maintenance of books of account will not apply. In other words, if a person adopts the provisions of section 44AD and declares income @ 6% or 8% (as the case may be) of the turnover, then he is not required to maintain the books of account as provided for under section 44AA in respect of business covered under the presumptive taxation scheme of section 44AD.
Payment of advance tax in respect of income from business covered under section 44AD
Any person opting for the presumptive taxation scheme under section 44AD is liable to pay whole amount of advance tax on or before 15thMarch of the previous year. If he fails to pay the advance tax by 15th March of previous year, he shall be liable to pay interest as per section 234C.
Note: Any amount paid by way of advance tax on or before 31st day of March shall also be treated as advance tax paid during the financial year ending on that day.
Provisions to be applied if a person does not opt for the presumptive taxation scheme of section 44AD and declares income at a lower rate, i.e., at less than 8%
A person can declare income at lower rate (i.e., at less than 6% or 8%), however, if he does so, and his income exceeds the maximum amount which is not chargeable to tax, then he is required to maintain the books of account as per the provisions of section 44AA and has to get his accounts audited as per section 44AB.
Consequences if a person opts out from the presumptive taxation scheme of section 44AD If a person opts for presumptive taxation scheme then he is also require to follow the same scheme for next 5 years. If he failed to do so, then presumptive taxation scheme will not be available for him for next 5 years. [For example, an assessee claims to be taxed on presumptive basis under Section 44AD for 2021-22. However, for AY 2022-23, if he did not opt for presumptive taxation Scheme. In this case, he will not be eligible to claim benefit of presumptive taxation scheme for next five AYs, i.e. from AY 2023-24 to 2027-28.]
Further, he is required to keep and maintain books of account and he is also liable for tax audit as per section 44AB from the AY in which he opts out from the presumptive taxation scheme. [If his total income exceeds maximum amount not chargeable to tax]
Presumptive Taxation Scheme of Section 44ADA For whom the presumptive taxation scheme of section 44ADA is designed?
The presumptive taxation scheme of section 44ADA is designed to give relief to small taxpayers engaged in specified profession.
Eligible persons who can take advantage of the presumptive taxation scheme of section 44ADA
A person resident in India engaged in following professions can take advantage of presumptive taxation scheme of section 44ADA:-
1) Legal
2) Medical
3) Engineering or architectural
4) Accountancy
5) Technical consultancy
6) Interior decoration
7) Any other profession as notified by CBDT
The Finance Act, 2021 has amended provisions of section 44ADA to define eligible assessee. W.e.f. Assessment Year 2021-22, the benefit of section 44ADA is eligible only in case of assessee who is an:
a) Individual; and
b) Partnership firm other than a Limited Liability Partnership as defined under clause (n) of sub-section (1) of section 2 of Limited Liability Partnership Act, 2008.
Manner of computation of taxable income in case of a person adopting the presumptive taxation scheme of section 44ADA
In case of a person adopting the provisions of section 44ADA, income will be computed on presumptive basis, i.e. @ 50% of the total gross receipts of the profession. However such person can declare income higher than 50%.
In other words, in case of a person adopting the provisions of section 44ADA, income will not be computed in normal manner but will be computed @50% of the gross receipts.
The presumptive income computed @ 50% is the final income and no further expenses will be allowed
A person who adopts the presumptive taxation scheme is deemed to have claimed all deduction of expenses. Any further claim of deduction is not allowed after declaring profit @ 50%.
While computing income as per the provisions of section 44ADA, separate deduction on account of depreciation is not available. However, the written down value of any asset used in such business shall be calculated as if depreciation as per section 32 is claimed and has been actually allowed.
Payment of advance tax in respect of income from professions covered under section 44ADA
Any person opting for the presumptive taxation scheme under section 44ADA is liable to pay whole amount of advance tax on or before 15th March of the previous year. If he fails to pay the advance tax by 15th March of previous year, he shall be liable to pay interest as per section 234C.
Maintenance of books of account if a person opts for presumptive taxation scheme of section 44ADA
In case of a person engaged in a specified profession as referred in section 44AA(1) and opts for presumptive taxation scheme of section 44ADA, the provision of section 44AA relating to maintenance of books of account will not apply. In other words, if a person opt for the provisions of section 44ADA and declares income @50% of the gross receipts, then he is not required to maintain the books of account in respect of specified profession.
Provisions to be applied if a person does not opt for the presumptive taxation scheme of section 44ADA and declares his income from profession at lower rate (i.e. less than 50%)
A person can declare income at lower rate (i.e. less than 50%), however, if he does so, and his income exceeds the maximum amount which is not chargeable to tax, then he is required to maintain the books of account as per the provisions of section 44AA and has to get his accounts audited as per section 44AB.
Presumptive Taxation Scheme of Section 44AE Applicability of the presumptive taxation scheme of section 44AE
The scheme of section 44AE is designed to give relief to small taxpayers engaged in the business of plying, hiring or leasing of goods carriages.
Eligible taxpayer and eligible business for the purpose of the presumptive taxation scheme of section 44AE
The provisions of section 44AE are applicable to every person (i.e., an individual, HUF, firm, company, etc.).
The presumptive taxation scheme of section 44AE can be adopted by a person who is engaged in the business of plying, hiring or leasing of goods carriages and who does not own more than 10 goods vehicles at any time during the year.
A person who owns more than 10 goods vehicles cannot adopt the presumptive taxation scheme of section 44AE
The presumptive taxation scheme of section 44AE can be adopted by a person who is engaged in the business of plying, hiring or leasing of goods carriages and who does not own more than 10 goods vehicles at any time during the year.
The important criterion of the scheme is the restriction on owning of not more than 10 goods vehicles at any time during the year. Thus, if a person owns more than 10 goods vehicles at any time during the year, then he cannot take advantage of this scheme.
The manner of computation of taxable business income in case of a person adopting the presumptive taxation scheme of section 44AE
In case of a person who is willing to opt for the presumptive taxation scheme of section 44AE, income will be computed on an estimated basis.
For Heavy Goods Vehicle, income will be computed at the rate of Rs. 1,000 per ton of gross vehicle weight for every month or part of a month during which the heavy goods vehicle is owned by taxpayer. In case of vehicles other than heavy goods vehicle, income will be computed at the rate of 7,500 for every month or part of a month during which the goods carriage is owned by taxpayer. Part of the month would be considered as full month.
Note 1 : If the actual income is higher than the presumptive rate, i.e., higher than Rs. 1,000/Rs. 7,500, then such higher income can be declared.
Note 2 : “Heavy Goods Vehicle” means any goods carriage having gross vehicle weight exceeding 12,000 kilograms.
Illustration
Mr. Khush is engaged in the business of plying, hiring or leasing of goods carriage. Throughout the year 2022-23 he owned 9 goods vehicles (other than heavy goods vehicles). What will be the taxable income from the business of plying, hiring or leasing of goods carriages if he adopts the provisions of section 44AE?
**
As per the provisions of section 44AE, for Heavy Goods Vehicle, income will be computed at the rate of Rs. 1,000 per ton of gross vehicle weight for every month or part of a month during which the heavy goods vehicle is owned by taxpayer. In case of vehicles other than heavy goods vehicle, income will be computed at the rate of 7,500 for every month or part of a month during which the goods carriage is owned by taxpayer.
In the present case, Mr. Khush owned 9 goods vehicles (other than heavy goods vehicles) throughout the year and, hence, income will be computed as follows:
|
Particulars |
Amount (Rs.) |
| Income per month per goods vehicle | 7,500 |
| (×) No. of goods vehicles | 9 |
| Monthly income as per the provisions of section 44AE from 9 goods vehicles | 67,500 |
| (×) No. of months in the year during which the vehicles were owned | 12 |
| Total income from business of plying, hiring or leasing goods carriages as per the provisions of section 44AE | 8,10,000 |
Illustration
Mr. Sunil engaged in the business of plying, hiring or leasing goods carriages. He owned 5 heavy goods vehicle having gross weight of 13,000 kilograms and 4 other goods vehicle during the previous year 2022-23. What will be his taxable income as per the provisions of section 44AE?
**
As per the provisions of section 44AE, for Heavy Goods Vehicle, income will be computed at the rate of Rs. 1,000 per ton of gross vehicle weight for every month or part of a month during which the heavy goods vehicle is owned by taxpayer. In case of vehicles other than heavy goods vehicle, income will be computed at the rate of 7,500 for every month or part of a month during which the goods carriage is owned by taxpayer.
In the present case, Mr. Sunil owned total 9 goods vehicles in which 5 are heavy goods vehicles having gross weight of 13,000 Kilograms. Hence, income will be computed as follows:
|
Particulars |
Rs. |
| Income per month per heavy goods vehicle ( 13,000 kilograms i.e., 13 ton) | 1,000 x 13 |
| (x) No. of heavy goods vehicle | 5 |
| Monthly income in case of heavy goods vehicle as per the provisions of section 44AE | 65,000 |
| (x) No. of months in a year | 12 |
| Total income as per the provisions of section 44AE from heavy goods vehicle (A) | 7,80,000 |
| Income per month per goods vehicle (other than heavy vehicle) | 7,500 |
| (x) No. of vehicles other than heavy goods vehicle | 4 |
| Monthly income as in case of vehicles other than heavy goods vehicle as per the provisions of section 44AE | 30,000 |
| (*) No. of months in a year | 12 |
| Total income as per the provisions of section 44AE from vehicles other than heavy goods vehicle(B) | 3,60,000 |
| Total income from business of plying, hiring or leasing goods carriages as per the provisions of section 44AE (A+B) | 11,40,000 |
The presumptive income computed at the rate of Rs. 1,000 per ton or Rs. 7,500 per goods vehicle per month is the final income and no further expenses will be allowed or disallowed
Under the normal provisions of the Income-tax Act, taxable business income will be computed after allowing deduction in respect of expenses which are deductible as per the Income-tax Act and after disallowing expenses which are not deductible as per the Income-tax Act.
In case of a person who is opting for the presumptive taxation scheme of section 44AE, the provisions of allowance/disallowances as provided for under the Income-tax Act, will not apply and income computed at the presumptive rate of Rs. 1,000/Rs. 7,500 will be the final income. In other words, the income computed at the rate of Rs. 1,000/Rs. 7,500 per goods vehicle per month will be the final taxable income of the business and no further expenses will be allowed or disallowed.
However, in case of a taxpayer, being a partnership firm, opting for the presumptive taxation scheme, from the income computed at the presumptive rate of Rs. 7,500 per goods vehicle per month, further deduction can be claimed on account of remuneration and interest paid to partners (computed as per the Income-tax Act).
While computing income as per the provisions of section 44AE, separate deduction on account of depreciation is not available, however, the written down value of any asset used in such business shall be calculated as if depreciation as per section 32 is claimed and has been actually allowed.
No need to maintain books of account as prescribed under section 44AA
Section 44AA of the Income-tax Act, 1961 has provisions relating to maintenance of books of account by a person engaged in business/profession. Thus, a person engaged in business/profession has to maintain books of account of his business/profession according to the provisions of section 44AA.
No need to maintain books of account as prescribed under section 44AA
In case of a person opting for the presumptive taxation scheme of section 44AE, the provisions of section 44AA relating to maintenance of books of account will not apply. In other words, if a person adopts the provisions of section 44AE and declares his income at the rate of Rs. 7,500 per goods vehicle per month, then he is not required to maintain the books of account as provided for under section 44AA in respect of business covered under the presumptive taxation scheme of section 44AE.
Applicability of the provisions relating to payment of advance tax
There is no concession as regards payment of advance tax in case of a person who adopts the presumptive taxation scheme of section 44AE and, hence, he will be liable to pay advance tax even if he adopts the presumptive taxation scheme of section 44AE.
Provisions to be applied if a person does not opt for the presumptive taxation scheme of section 44AE and declares income at a lower rate, i.e., at less than Rs. 1,000 per ton or Rs. 7,500 per goods vehicle per month
A person can declare his income at lower rate (i.e., at less than Rs. 1,000 per ton or Rs. 7,500 per goods vehicle per month). However, if he does so, then he is required to maintain the books of account as per the provisions of section 44AA and has to get his accounts audited under section 44AB.
[As amended by Finance Act, 2022]
hi i want to sell my property valued in guide line 50 lacs into real estate business after converting to stock asset by paying tax.20% Now i can split the land to layout 2CR .Can I opt for 44AD exemption 8 % min no book tax
Sir/ Ma’am, please reply my query.I am a practicing doctor. I have opted presumptive taxation Schemes since Assessment year 1918-19 to 2022-23. But in Assessment year 2023-24, I have not opted 44ADA because I was not eligible(because my professional income increased to 60 lakh) and file my return as normal. Can I opt this presumptive taxation scheme u/s 44ADA for the ASSESSMENT YEAR 2024-25?
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If someone earns 60% net profit out of gross receipts under 75 lakh per year and he invests all of his earnings into mutual funds
… in that case, can he still submit tax on 50% of gross receipts without maintaining and auditing accounts?
… or is that illegal and he must submit tax on 60% income because his investments show that he earned more than 50%?
Hello Sir,
I am a salaried person having salary of 54Lacs and paying a huge tax. Can i change my employment status from an employee to consultant engineer/contract employee/professional and avail the Section 44ADA benefits? If yes, can i still get the payment on a monthly basis from my employer on a fixed day just like a permanent employee or i need to issue any invoice to my employer on a monthly basis for the services that i am offering them ?
My accounting consultancy receipts are estimated to be Rs.15/- lakhs. Consequently I have not taken GST Registration. Can I claim 44ADA or GST registration is manadatory
44ADA does not say anywhere that you need to have GST registration.
If I have filled 65 lakhs of presumptive income @ 10% and taxable income comes up to 6,50,000/-. My actual deposits and investments and stock purchases are more than 6,50,000/- will I be sued in this case?
No, you will not be sued in this case. As per the section 44AD of the Income Tax Act,1961. In case of business income having turnover of less than Rs.2 crore you only need to pay tax on 6% of turnover. for further discuss you can contact us at 9024915488.
I assume gross receipts exclude GST on rent or sale. I am also assuming GST is not part of the topline or revenue when you compute P&L
There are some occasional mentions where AO still asks for books of accounts despite being under Section 44. Is that easily defendable, esp if there is a likelihood that actual profits are above 10%
If it’s a partnership (under Section 44), is the net income of the partnership taxed at 6% and then post tax, the profit which then gets distributed to individual partners are tax free in their income statement?
hi
I am a travel agent. can I file ITR 4 U/S 44ADA
PLS guide about this.
Sir
Our business relating with loss surveyor and our total turnover is below 40 lakhs, in this case, Is audit compulsory.
Kindly let me know
No, Tax audit is not compulsary in your case. As presentive income in your case is Rs.2,40,000 i.e.( Rs.40 lakhs * 6%) in which zero tax liability will occur. But if you want to carry forward of your losses from business than tax audit is compulsary. for further discussion you can contact me at 9024915488. thanks
If I am claiming business income under section 44ADA and in the past I have claimed depreciation and have unabsorbed depreciation being carried forward, then will the amount of unabsorbed depreciation be adjusted while computing taxable income under section 44ADA
I am getting pension as well as consultancy fee, I file itr4 under section 44ADA.but my remuneration from technical advice is clubbed with pension and other income like interest in FDR.
Is it right? Can there not be seperate calculation of tax on salary plus pension and consultancy income @6%
Hi Is this tax evasion. I have recieved a big chunk of money as bonus for my consultant work this month. If I submit an invoice to client with my usual amount for the remaining months in this financial year I will cross the 50 lakhs limit. So instead If I decided to reduce my monthly invoice amount to a certain amount and trying to reduce the income earned or total invoice amount to less than 50 lakhs to avoid going over the 50 lakhs bracket. Is it illegal or tax evasion ?
If you are disclosing your actual income, then there is no tax evasion!
If your income exceeds Rs. 50 Lakhs Tax audit shall be applicable and presumptive scheme shall not be available!
Secondly, GST shall be applicable as your T/O is above 20 Lakhs.
Regards
I earned professional service charges from whitehat Education p Ltd. for taking coding classes online to teach students. Please advise the remuneration received will be eligible under section 44 ADA.
Please guide me which code you used in 44ADA??
I have income from Legal Profession as well as from Business ( Forex Trading in foreign currency other than indian currency pairs ) , can i file ITR-4 U/S 44 AD & U/S 44 ADA , will there be any problem in future for me if I reflect both Professional as well as Business Income at a time ? Is Forex Trading ( Foreign Currency pairs other than Indian currency ) legal in India ? Please answer my queries in my email i.d. [email protected]
Firm having filed return as per sect. 44AD. As per partnership deed fixed monthly remuneration and interest on capital is entered in books maintained by firm.
Whether partners will have to show interest and remuneration received from firm u/s. 28, even when firm has filed return declaring income @8% of gross turnover?
Impact of sec. 145A on 44AD pl explain
In the wake of Corona the businesses were incurring losses. But in above section44AD to escape from maintaining account one has to declare profit.If he is a small business turnover less then 40 lac in earlier years but now having lasses he has to maintain the accounts and get them audited also.This is a double burden on the business. one no profit and second keep full account and pay accontant and auditor. I think someone should bring this point of act in the knowledge of CBDT and give relief to this section of business class.
Ramesh
Very well explained
Hi,
I am a salaried central govt.employee and my income from salary is about 8.5lakhs after all deduction including NPS tier 1(NPS). In addition to that I have intraday profit of ₹ 450/- and short time capital gain of ₹ 42k from trades in equity share. I earned dividends of ₹200 also from my share holdings. Which ITR form I need to use for filing income tax for the AY2021-22
Pls approach a CA and get it filed. Wrong filing will lead to tax complications and notice. Instead you can get our help [email protected]
Hi,
I have an income of 1L in 44ADA, I wanted to know do I need to fill Gross Profit in Profit & Loss of ITR also under 44ADA?
I am showing gross receipts of 1L in Row 64(ii)(a) and making an entry in Row 62 and if I also show gross profit then final TTI includes my 100% incomes while it should only do 50% for computing tax…
Please help me figure out how can I fill row 64 entry under 44ADA.
Pls approach a CA and get it filed. Wrong filing will lead to tax complications and notice. Instead you can get our help [email protected]
hello sir,
one of my client who is doctor whose receipt is less then 50 lakhs and he opted presumptive scheme u/s 44ADA BUT his profit % is less then 50% so he require to do audit undetr section 44 AB, so my question is my client require to deduct TDS ON Specific expenses as per income tax act requirement?
As Gross Receipts is less than 5OL, 44ADA is applicable As you declare less than 50% as income you must get your books audited by a CA. You must TDS out of the payment made by you subjected to TDS and remit to Govt as amended by FA 2020. For clarifications mail me [email protected]
An assessee for the AY 1718 ,1819 declared income under 44AD Tover was below 50 lakh 40 lakh and for the ay 1920 he opted 44AB for Tover above 1 corer, now can he further declare his incocme under 44AD when Tover is above twocorer.
Need proper Information in this case as you missed certain information. Based on the information you provided you cannot adopt sec 44AD as your T/O is more than 2 Cr.
I am a doctor and total saving in FY 19_20 is 20 lacks and gross revenue is 24 lacks. I have no other sources of income. My question is whether I have to show income of at least 20 lacks or can I show income of
12 lacks as per sec 44ADA?
Yes you can show only 50% of the gross receipt as your income for that relevant previous year
Sec 44ADA says assessee can declare an income at least 50% of gross receipts or any sum more than that claimed to have been earned by the Assessee. Act prescribes a minimum of 50% and it can go up to 100% based on your actual expenses. Sec 44AA(1) provides the books of accounts to be maintained by doctors and other professionals. Your accounts match with the income that you declare.
When income is presumptive, how expense can be actual, it is also presumptive. When audit is not done, how do we arrive on actual expense.
If a person has higher contribution from rental revenue (say 25-30 lacs) and small contribution from other business say baking business (5-7 lacs), can the person claim presumptive tax and pay 6-8% IT instead of 30%? GST registration is already there because of rent. What are the other requirements? Thanks
Your rental income must be taxed as house property income and not as business income and hence sec 44Ad cannot be applied. However you can apply your baking business income u/s 44AD.
Please let us know the following
1. what will be the penalty for Taxable Turnover of Rs.10 Lakhs if Advance Tax not paid by a proprietor for the financial year 19-20
2. If the Tax amount is below 1 lakh for the financial year 19-20 whether and the proprietor has not paid the advance tax whether penalty will be applicable
Dear Sir,
In a proprietary Concern when opt for Presumptive Taxation Scheme, after calculating the Total Turnover of Financial year 2019-20 @ 6% and then whether we have to add Interest on FD & Duty Drawback amount as a taxable Turnover for eg.:
6% on Turnover – 400000
Interest on FD – 10000
Duty Drawback – 46000
Taxable Turnover – 4,56,000
or
We have to consider only 6% on Turnover – 400000 as taxable Turnover and need not to consider Interest on FD & Duty drawback amounts
Please clarify?
Hi,
My salary for the financial year 2019-2020 is more than 6 lacks and I did losses in stock market equity for intraday and delivery. My total buy values is 18,065,228.83 and Total sell value is
18,045,028.29. Which ITR form I need to fill? Do I need do audit for it? can you please help with this.
Thanks in advance,
Pradip
Namaste,
I am a doctor and I have just retired from a company and will continue as a consultant. Hence a part of this year I an an employee and a part a consultant. Can I file the ITR as presumptive income /tax?
GROSS VEHICLE WEIGHT MEAN VEHICLE’S OWN WEIGHT WITH MATERIAL WEIGHT
I want to file income tax return for laundry
In which nature of code is available for laundry and in which ITR Form File
Hi,
Thank you all for the nice article and healthy discussion on the topic.
I am into a proprietorship business engaged in renting of electrical equipment since last 40 years. I am drawing some rental income from immovable properties and I am a regular GST and Income tax prayer.
Somehow, I’m am now tired of the bookkeeping practices, errors the practitioners commit while filing returns and the stress we undergo, despite being ready and willing to contribute rightful taxes !
My question is,
1. am I eligible to opt for presumptive taxation scheme
2. How do I calculate taxes on rent recived from immovable properties and rent received from hiring of electrical equipment business..?
Please advice !