The Finance Act, 2016 has inserted a new section 44ADA providing for special provision for computing profits and gains of profession on presumptive basis. This measure would definitely help the specified professionals in payment as well as compliances under the income-tax law.
Section 44AD relating to presumptive taxation applies only to businesses run by residents Individual, HUF and Firms excluding LLP. Tax on presumptive basis should be extended to all assessees, including a LLP. Only section 44AD excludes LLP, for which there appears to be no cogent reason. Otherwise under the Act, a LLP and a Firm are treated at par.
system through a bank account, exceeds ten thousand rupees, such expenditure shall be ignored for the purposes of determination of actual cost of such asset. Similar amendment is made in section 35AD. Further, cash payment limit under section 40A(3) is also reduced to Rs.10,000. Thus, the Finance Act 2017 disallowed even the capital expenditure incurred in cash thereby restricting the amount of allowable depreciation under section 32 with effect from 1 April 2018 i.e. AY 2018-19.
The underlying idea behind allowing the investment linked incentive granted under Section 35AD of the Act is to enable the taxpayer to set-off the business losses incurred by this write-off against the taxable profits from their existing businesses and reduce their tax liability in the year of deduction and thereby to provide part of the resources of investment required for setting up of the businesses.
The Finance Act 2017 inserted sub-section (5A) in the existing section 45 to provide that the capital gains arising to an individual or Hindu undivided family under a Joint Development Agreement shall be taxed in the year in which completion certificate for the whole or part of the project is received
According to the new provisions, in case of an eligible assessee engaged in eligible business, income shall be deemed equal to a sum @ 8% of the turnover or higher income as per books. Section 44AD is applicable to any business except the business of plying
The amendment made via the Finance Act, 2016 to disallow deduction of expenditure in the nature of salary, remuneration, interest paid to the partner as per section 40(b) out of presumptive income. This amendment would hit small and medium firms
(4) Where an eligible assessee declares profit for any previous year in accordance with the provisions of this section and he declares profit for any of the five assessment years relevant to the previous year succeeding such previous year not in accordance with the provisions of sub-section (1)
This section provides for adoption of stamp duty value in case of transfer of land or building or both held as stock-in-trade. Several issues have cropped up due to implementation of this section in its present form and suggestions thereof are as under
Section 43A was inserted in the Income-tax Act, 1961 by Finance (No. 2) Act 1967, which permitted Capitalization of Foreign Exchange Fluctuation Loss in the borrowing used for acquisition of assets outside India.
