Presumptive Tax Section 44AD - Interest Income/ Bill Discounting

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  1. Dhiren Talati

    Dhiren Talati New Member

    Can an individual engaged in the business of lending money (not holding Money Lending License)and earning interest income opt for presumptive taxation scheme as per the provisions of section 44AD of the Income Tax Act 1961? If yes what would be the turnover a) his gross interest income or b) aggregate of the amount of money lent on each occasion ?
  2. ZED

    ZED Well-Known Member


    "eligible business" means,—

    (i) any business except the business of plying, hiring or leasing goods carriages referred to insection 44AE; and

    (ii) whose total turnover or gross receipts in the previous year does not exceed an amount of one crore rupees. [Limit increased to 2 crore by F.A. 16]

    Extracts from Guidance note on tax audit states:

    5.16 The term "gross receipts" is also not defined in the Act. It will include all receipts whether in cash or in kind arising from carrying on of the business which will normally be assessable as business income under the Act. Broadly speaking, the following items of income and/or receipts would be covered by the term "gross receipts in business":

    (i) Cash assistance (by whatever name called) received or receivable by any person against exports under any scheme of the Government of India;

    (ii) Any duty of customs or excise or service tax re-paid or repayable as drawback to any person against exports under the Customs and Central Excise Duties and Service tax Drawback Rules, 1995;

    (iii) The aggregate of gross income by way of interest received by the money lender;
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