Applicable : Any business except plying, hiring, or leasing goods carriage referred U/s 44AE and whose turnover is less than 100 lacs. It covers manufactures, job workers, processing industry and wholesalers
Eligible Assessee: Any resident Individual ,HUF, Partnership firms(excluding LLP) and who has not claimed deduction u/s 10AA or deduction under any provision of chapter VI-A under heading “C-Deduction in respect of certain incomes”
There has been insertion by finance act 2012 in section 44AD to exclude applicability of presumptive provision on following—-
- Person carrying profession as mentioned u/s 44AA(1) –legal, medical, engineering, or architectural or accountancy profession or technical consultancy or interior decoration or any other profession notified by the board.
- Person earning commission in nature of brokerage.
- Person carrying agency business
CERTAIN OTHER POINTS OF CONSIDERATION
- An assessee opting for the above scheme shall be exempted from maintenance of books of account related to such business as required under section 44AA.
- The assessee can voluntarily declare a higher income in his return
- An assessee opting for the above scheme shall be exempted from payment of advance tax related to such business.
- In the case of assessee being firm, the normal deduction in respect of salary and interest paid to the partners shall be allowed as deduction out of such presumptive income subject to conditions and limits specified in clause (b) of section 40.
- In case assessee claims that he has earned income lower than specified percentage and such income is more than maximum amount not chargeable to tax, Ss. 44AD(5) and 44AA(2)(iv), mandates him to maintain books of accounts and other documents as specified u/s 44AA, get them audited from the accountant and furnish report as required u/s 44AB.