SECTION 44AD (PRESUMPTVE TAXATION(A\Y 2013-14)

Applicable    : Any business except plying, hiring, or leasing goods carriage referred U/s 44AE and whose turnover is less than 100 lacs. It covers manufactures, jobworkers, processing industry and wholesalers

Eligible Assessee  : Any resident Individual ,HUF, Partnership firms(excluding LLP) and who has not claimed deduction u/s 10AA or deduction under any provision of chapter VI-A under heading “C-Deduction in respect of certain incomes”

There has been insertion by finance act 2012 in section 44AD to exclude applicability of presumptive provision on following:-

· Person carrying profession as mentioned u/s 44AA(1) –legal, medical,  
  engineering, or architectural or accountancy profession or technical 
  consultancy or interior decoration or any other profession notified by the 
  board.

· Person earning commission in nature of brokerage.

· Person carrying agency business

CERTAIN OTHER POINTS OF CONSIDERATION

· An assessee opting for the above scheme shall be exempted from  
  maintenance of books of account related to such business as required under 
  section 44AA.

· The assessee can voluntarily declare a higher income in his return

· An assessee opting for the above scheme shall be exempted from payment 
  of advance tax related to such business.

· In the case of assessee being firm, the normal deduction in respect of salary 
  and interest paid to the partners shall be allowed as deduction out of such 
  presumptive income subject to conditions and limits specified in clause (b) 
  of section 40.

· In case assessee claims that he has earned income lower than specified 
  percentage and such income is more than maximum amount not chargeable    
  to tax, Ss. 44AD(5) and 44AA(2)(iv), mandates him to maintain books of 
  accounts and other documents as specified u/s 44AA, get them audited from 
  the accountant and furnish report as required u/s 44AB.

This article is compiled by Student of ICAI SHUBHI GOEL. She can be reached at Shubhigoel1989@gmail.com

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