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Presumptive Income u/s 44AD of Income Tax Act, 1961 [w.e.f. AY 2011- 12]

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Presentation on theme: "Presumptive Income u/s 44AD of Income Tax Act, 1961 [w.e.f. AY 2011- 12]"— Presentation transcript:

1 Presumptive Income u/s 44AD of Income Tax Act, 1961 [w.e.f. AY ]

2 Applicability  Any business except the business of plying, hiring or leasing goods carriages specified u/s 44AE  whose Total Turnover or Gross Receipts in the Previous Year does not exceed Rs. 60 Lakhs. Amount of Presumptive Income  8% of the Total Turnover or Such higher sum as declared by the Assessee. * Presumptive Income u/s 44 AD or a higher sum declared by the Assessee, will be deemed to be the Profits and Gains of Business or Profession.

3 Eligible Assessee  Resident Individual,  Resident HUF  Resident Partnership Firm [ but not being a Limited Liability Partnership Firm, and  Deduction u/s 10A, 10AA, 10B, 10BA or 80-IA / IAB / IB / IC / ID / IE / 80 JJAA / 80 LA / 80 QQB / 80 RRB is not claimed in the relevant assessment year. Advance Tax  Provisions relating to Advance Tax payment are not applicable to an Eligible Assessee, in so far as they relate to the Eligible Business..

4 General Issues Allowability of deduction u/s 30 to 38Deemed to be allowed Allowability of Depreciation in case of subsequent previous years WDV of Assets shall be computed, as if Depreciation had been allowed in earlier years Assessee declares lower Income Books of Accounts to be maintained u/s 44 A and audit u/s 44AB has to be fulfilled. Benefit of Chapter VI A Deduction u/s 80C to 80U shall be available to the Assessee. Computation of Presumptive income of a Firm Compute Presumtive Income u/s 44AD Less Interest, salary and remuneration to Partners. The balance is chargeable to tax.

5 Other Important Considerations Material Supplied by the Contractee at a Fixed Cost to the Civil Construction Contractor shall not be included in the Gross Receipts or Turnover u/s 44AD - Brij Bhusan Lal Parduman Kumar 115 ITR 824 [SC] Civil Construction includes Construction or repair of any building, bridge, dam or other structure or any other structure or of any canal or road, Execution of any works contract like works relating to electrical fitting, plumbing, land filling, landscaping work, etc. - Circular 684 dated Interior Decoration does not come under the business of Civil Construction - Sanjay Kataria 3 SOT 18 [Del.] “Calculation of Rs. 60 lacs“ – Its not aggregate of all eligible business, but can be calculated for each eligible business separately.


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