Sec 44AD under Income tax act 1961

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  1. suraj agrawalla

    suraj agrawalla New Member

    Sir, it has been mentioned in your blog that assesees under sec44AD having turnover below 1 crore can opt for the presumptive taxation scheme and thereby their income will be assumed to be 8% or more of total turnover but at present when we are showing income above 8% we received defective notice from income tax department under section 139(9).

    PLz clarify regarding the above.
     
  2. Shoban Singh

    Shoban Singh New Member

    You must revise your return addressing the defects the Income Tax Department has pointed out within 15 days from the receipt of intimation.

    You can seek an extension by writing to your local Assessing Officer, if you fail to revise your income tax return within 15 days.

    Revising your income tax return in response to the notice
    – Choose the Assessment Year and download the ITR Form the Income Tax Department website: https://incometaxindiaefiling.gov.in/e-Filing/
    – On the income tax return, select the option “In response to a notice under Section 139(9) where the original return filed was a defective return.
    – Enter the communication reference number, available on the notice, and acknowledgment number and date of filing original return.
    – Complete the income tax return like you normally would.

    – Generate the XML File and upload it to the Income Tax Department website
    – Select “e-File in response to notice u/s 139(9)” under the “e-File” section and upload the rectified XML using the password mentioned in the notice.

    – A confirmation message with an acknowledgement number appears on the Department on successful upload.

    see more detail below :-

    To give relief to small assessees, the Income-tax Law has incorporated a simple scheme commonly known as Presumptive Taxation Scheme. There are two schemes, viz., the scheme of section 44AD and the scheme of section 44AE. An assessee adopting these provisions is not required to maintain the regular books of account and is also exempt from getting the books of account audited. In this advance learning we will cover the provisions of the presumptive taxation scheme provided in section 44AD. The scheme of section 44AD is designed to give relief to small assessees engaged in any business (except the business of plying, hiring or leasing of goods carriages referred to in section 44AE). The detailed provisions in this regard are as follows:

    The provisions of section 44AD are applicable to such resident assessee who is an Individual, Hindu Undivided Family and Partnership Firm but not Limited Liability Partnership Firm. Unlike section 44AE, in case of section 44AD there is a restriction on which categories of assessees can opt for the scheme. Only specific categories of resident assessees as discussed above can opt for this scheme.

    The provisions of section 44AD can be adopted by the eligible assessee who is engaged in any business (except the business of plying, hiring or leasing of goods carriages referred to in source (As amended by Finance Act, 2013) : www.trpscheme.com section 44AE and except by the assessee who is engaged in any profession as prescribed under section 44AA or is running agency business or is earning income in the nature of commission or brokerage). Further, turnover or gross receipts from such business should not exceed the limit of audit prescribed under section 44AB (i.e.,Rs. 1,00,00,000 for the previous year 2012-13). In this case Mr. Soham is running a provision shop whose turnover is Rs. 99,00,000 during the previous year 2012-13. Thus, he satisfied both the criteria of the scheme and, hence, he can adopt the provisions of section 44AD for his business of provision shop.

    The presumptive taxation scheme under these provisions can be opted for by the eligible assessee who is engaged in any business (except the business of plying, hiring or leasing goods carriages referred to in section 44AE), whose turnover or gross receipts from such business do not exceed the limit of audit prescribed under section 44AB (i.e., Rs. 60,00,000 for the previous year 2011-12 and Rs. 1,00,00,000 from the previous year 2012-13). Further, these provisions can be adopted by the assessee only if he has not claimed deduction under section 10A/10AA/10B/10BA or under sections 80HH to 80RRB in the relevant year. Moreover, the provisions of section 44AD cannot be adopted by an assessee who is engaged in any profession as prescribed under section 44AA or is carrying on an agency business or is earning income in the nature of commission or brokerage. The important criteria in the scheme is the turnover or gross receipts from the eligible business. To opt for the scheme, the turnover should not exceed Rs. 1,00,00,000.
     
    suraj agrawalla likes this.
  3. suraj agrawalla

    suraj agrawalla New Member

    Thanks for your timely reply madam.
     
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