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This section is nothing but provides a relaxation to the tax payers to declare income on presumptive basis, which should not be less than 8% of the gross turnover or gross receipt during the financial year. However this relaxation is provided to certain persons and certain business subject to specified conditions which are provided under Sec 44AD of Income Tax Act, 1961. These certain business and certain persons are named as Eligible Business and Eligible Assessee in the Act. Let us discuss this Section.
Section 44AD widely affects the businesses in small sector. It was brought in its present shape by Finance Act 2009 wef AY 2011-12. It implies that legislature at that time thought it fit to take a year extra to have impact study of the section.
The existing provisions of section 44AD provide for a presumptive taxation scheme for an eligible business. Where in case of an eligible assessee engaged in eligible business having total turnover or gross receipts not exceeding rupees one crore, a sum equal to eight per cent.
1. A PRESUMPTIVE INCOME SCHEME FOR PROFESSIONALS The existing scheme of taxation provides for a simplified presumptive income scheme for persons engaged in business. The Committee was of the view that this scheme is quite popular amongst small traders. It was felt that there is a strong case for introducing a similar simplified presumptive income […]
1. RECOMMENDATION TO INCREASE THE ELIGIBILITY UNDER THE PRESUMPTIVE SCHEME FOR SMALL BUSINESSES FROM THE EXISTING RUPEES ONE CRORE TO RUPEES TWO CRORE The existing presumptive income scheme under section 44AD of the Income Tax Act is applicable to an individual, Hindu undivided family or a partnership firm (not to limited liability partnership). This scheme […]
It is recommended that the threshold limit may be revised from the present one crore rupees to two crore rupees for assessees carrying on business and from the present twenty-five lakhs rupees to rupees one crore for assessees exercising a profession.
10 Reasons, why you cannot rely on order dated 26.09.2015 which says that due date for Income Tax Return been extended to 15th October 2015.1. We confirmed with CBDT officials and they denied issue of any such Notifications. 2. We checked the official Websites of Income Tax, Government of India and Finance ministry and have not found any such notification, Order or announcement.
1. DUE DATES OF FILING OF ITR AND TAX AUDIT REPORTS We all know that the due date of filing of the returns and audit reports are as follows- 31st July – filing of return of income for the people other than whom tax audit under income tax act applies and companies. 30th September – filing of tax audit report, Income tax return of the person to whom tax audit under income tax is applicable and companies registered in India.
I would like to attract your attention for seeking extension of the Tax Audit date of 30th September 2015 as it is totally unjustified to look towards the fraternity of Chartered Accountants to complete their job within 23 days against statutory availability of 180 days.
Income Tax Act has also given independence to the small tax payers for maintaining books of accounts and accordingly paying tax under section 44AD. These Businessman has 2 options, 1) show profit at 8% of turnover and has taxable income or 2) If he want to show less profit and have taxable income then tax audit is compulsory. Further if profit is below 8%, then scrutiny, enquiry, etc may be invited.
