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

44AD Applicability

25 November 2014

The amended provisions of this section are applicable with effect from 1st April, 2011 and will accordingly apply in relation to assessment year 2011-12 and subsequent assessment years. The section heading was as Profits and gains of business of civil construction whereby it was applicable to only such assessees who were engaged in business of […]

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Gross Receipts in 44AD Section

23 November 2014

“Gross Receipts” is not defined in the Act • It includes all the receipts in cash or kind. • Arising from carrying on of the business. • Which is assessable as business income under the act. • U/s 145(1) “Sales”, “Turnover” or ”Gross Receipts” computes either on cash or mercantile system. As per the Guidance […]

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44AD Comparision with other Provisions

21 November 2014

Difference Between Earlier provisions and Amended provisions- At Glance  S.N.  Basis  Upto the A.Y.2010-11 From the A.Y.2011-12 1  Eligible assessee  Individual, HUF, AOP, BOI, firm, Co., Co-operative society or any other person.  Individuals, HUFs & partnerships firms (not being a LLP). 2  Eligible business  Civil construction or supply of labour for civil construction.  Any business […]

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Section 44AD(5) determination Issues

19 November 2014

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

17 November 2014

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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No deduction u/s 30 to 38 allowable

15 November 2014

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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Permissibility of adopting the principle

13 November 2014

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 Eligible Businesses

11 November 2014

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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Section Applicable to the Income Under the Head “PGBP”

09 November 2014

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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Reason for introducing 44AD

07 November 2014

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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