Section 44AD for Income Tax in India | Details about section 44AD

Section 44AD(5) determination Issues

26 March 2013

Income from Eligible Business > 8% of Turnover and Total Income Exceeds Exemption Limit ===44AD applicable. Income from Eligible Business = 8% of Turnover and Total Income Exceeds Exemption Limit ===44AD applicable. Income from Eligible Business claimed to be < 8% and Total Income Exceeds Exemption Limit =44AA & 44AB applicable. Income from Eligible Business [...]

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Option to declare lower income than Deemed Income

26 March 2013

Sub‐Section (5) If an assessee claims that his income is lower than income deemed under section 44AD(1) and his total income exceeds the maximum amount not chargeable to tax. Then, He shall have to maintain the books of accounts related to such business u/s 44AA. He is also required to get them audited under section [...]

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Reason for introducing 44AD

26 March 2013

Reason for introducing new scheme for presumptive taxation  There has been a substantial increase in small businesses with the growth of transport and communication and general growth of the economy. A large number of businesses and service providers in rural and urban areas who earn substantial income are outside the tax‐net.  Introduction of presumptive tax [...]

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Permissibility of adopting the principle

23 March 2013

Where in a particular case, where amount of gross receipts is in excess of Rs. 60 lakhs (now 100 lakhs) and section 44AD is not applicable, then, the principle underlying said section can not be adopted, when it was not applicable as such as no legal authority had been shown to support the proposition. In [...]

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44AD Conflict Provisions

23 March 2013

Vide Finance Bill 2011, the Section 44AD has been revised and it is applicable to all businesses instead of only to civil construction business. On the other outset, limit of tax audit u/s 44AB is increased to Rs. 60 lakh from earlier limit of Rs. 40 lakh for financial year 2011-12 and been further increased [...]

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Section Applicable to the Income Under the Head “PGBP”

22 March 2013

Assessee, entitled to computation on presumptive basis, cannot avoid tax on income from fixed deposits assessable under the head ‐ other sources by claiming it to be a part of business income U/S 44AD ‐ Dy. CIT V Allied Construction (2007) 291 ITR (AT) 16 (Del) Income from Eligible Business  Total Income  Applicability of s. [...]

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No deduction u/s 30 to 38 allowable

22 March 2013

Sub‐Section(2) provides that if income is computed under section 44AD then, no deductions shall be allowable u/s 30 to 38. i.e. any deduction allowable under these sections shall be deemed to have been already given full effect to and no further deductions shall be allowable. However, in the case of a firm the normal deduction [...]

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WDV of assets of the eligible business

22 March 2013

Sub‐Section(3) provides that, the WDV of any asset of an eligible business shall be deemed to have been calculated as if the assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years. Deemed deduction of depreciation is assumed for the purpose of arriving [...]

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Payment of Advance Tax

22 March 2013

Sub‐Section(4) An assessee opting for the scheme shall be exempted from payment of advance tax related to such business. Issue:  How to calculate Advance Tax where the assessee is having both income from eligible business & other income:  Presumptive income is Rs 4 lakhs & other income is Rs 8 lakhs  In this case, whether [...]

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44AD Eligible Businesses

22 March 2013

If an assessee has multiple eligible businesses, then the turnover of all those businesses shall be clubbed to determine the limit of 60 Lakhs. Eligible as well as ineligible business Each Business is a separate business: Business 1‐Gross receipts < 60 lakhs Eligible business

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