ALL ABOUT OF SECTION 44AD OF THE INCOME TAX ACT

Section 44AD: Essence of law is to release small assessee from hectic tax compliance

Eligible assessee:

1.Resident individual

2.Resident HUF

3.Partnership firm – Not being LLP

Eligible business:    

Any business other than

1. Profession

2. General commission agent/ commission based agency business (w.e.f, A.Y.2011-2012)

3. Business of playing, hiring or leasing goods carriages

4. Whose turnover/gross receipt exceeds Rs 60 lacs/1 crore (From A.Y. 2013-2014)

Benefits: 

1. Assessee has not required to maintain books of accounts of the eligible business .

2. The income from the eligible Business is estimated @8% of the gross receipt or total turn over.

3. Assessee can voluntarily declare higher income than 8% of the total turn over or gross receipt.

4. All deduction under section 30 to 38 including depreciation and unabsorbed depreciation are deemed to have been allowed

5. Moreover, it will be assumed that dis-allowance, if any, under section 40, 40A, 43B have been considered while calculating the deemed income.

6. Assessee shall also be exempted from the payment of Advance Tax.

7. If returned income of the assessee is 8% or more of the total receipt/ turn over, the assessing officer dose not have any power to assess any thing excess of it.

8.Assessee opting for the above scheme shall also be exempted from the maintaining books of account and assessee is not under any obligation to explain individual Entry of cash deposit in the bank unless such entry has no nexus with Gross receipt. (CIT V SURINDER PAL (P&h)) 

RETURN FORM : ITR 4S

 

 

ASSESSEE CAN CLAIM LOWER INCOME ????

Yes, assessee can claim lower income than 8% , but following provisions are applicable in that case

1. Aseesee is required to maintain books of accounts and the same will required to be audited under section 44AB.

2. The all provisions of advance tax payment than applicable in this case.

3. Return from will be ITR 4.  

 

Be careful….!!!! These are the Last days of filling of income tax return

As the last days are coming we all are in hurry to complete our work and get relaxed as early as possible, due to this many time it is possible that defective/incomplete return gets uploaded.

Here below mentioned matters should keep in mind while filling income tax return.

First check

1)      First take print out of computation of income as the all basic details are in front of your eyes, so you could just go through the same quickly..

2)      In case of the income from salary (though timeline of filling of return of salaried person is over before this write up.)  you need to see that name, address & PAN of the employer is mentioned or not.

3)      In case of income from house property, if interest on housing loan was paid by assessee, do not forget to mention the date of purchase of the property for the same.

“As per section 24 of the income tax act, in case of Self occupied property, Interest on housing loan is deductible maximum up to 150000/- if the same is purchased after 01-04-2001 otherwise the same is deductible up to 30000.”

So, do not forget to mention date of purchase of property. If the same is forgot while filling of return than interest would be deducted maximum up to 30000/- (though the same is purchase after 01-04-2001) and also assessee should not forgot to state the date of purchase of house property, if the return is filled by Tax consultant.

4)      Do not forget to prepare a “Depreciation Chart” in case of business income if the depreciation chart was not prepared and depreciation was claimed against business income the same shall be disallowed.

5)      File tax audit details property otherwise, it could have been considered as defective return.

“Ye sab to but hui sab procedural matters ki , Ab bat karte hai apne fayde ki”

6)      Many times it had been seen that many consultant makes an error to enter last day of filling income tax return. Here we understand with one example.

If M/S ABC is a proprietorship concern and liable to get his account audited. In that case last day of filling income tax return is 30^thSeptember.

“Now what error could have been occurred?”

In spite of 30^th September many consultant write 30^thJuly (of course by mistake)

And if the same return is filed in the month of September. Assessee has burdened with the interest @ 12% p.a. on or above tax liability. (i.e, for the month of august and September)

   

7)      Do not forget to take tax credit of TDS/Advance tax in these hurry days.

8)      And last but not least

“Do not forget to pay fees to your consultant in time (joke a part).”