Opinion Of Eminent Legal Luminaries On Controversial Issues

Whether U/s. 44AD The Limit Is Qua Assessee Or Qua Business?

QUERY: For the purpose of section 44AD, is the limit to be decided qua assessee or qua business?
ANSWER: Qua both. The scheme is applicable to “an eligible assessee engaged in eligible business” The salient features of the new presumptive taxation scheme are as under:

a) The scheme is applicable to individuals, HUFs and partnership firms excluding limited liability partnership firms. It is also not be applicable to an assessee who is availing deduction under sections 10A, 10AA, 10B, 10BA or deduction under any provisions of chapter VIA under the heading “C – Deduction in respect of certain income” in the relevant assessment year.

b) The provisions of this section are not applicable to:

i) a person carrying on profession as referred to section 44AA(1);

ii) a person earning income in the nature of commission or brokerage; or

iii) a person carrying on any agency business

c) The scheme is applicable for any business, excluding a business covered under section 44AE, and whose gross turnover/receipt does not exceed Rs. 1/- crore.

d) The presumptive rate of income is prescribed @ 8% of gross turnover/receipt.

e) An assessee opting for the scheme is not liable for payment of advance tax.

f) An assessee opting for the scheme is not required to maintain books of account.

g) An assessee who shows an income below the presumptive rate and his total income exceeds the taxable limit, required to maintain books of account and also get them audited under section 44AB.

h) The scheme is applicable from assessment year 2011-12.
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Credit: Several of the queries and answers are reproduced with permission from the AIFTP Journal. We thank AIFTP for generously allowing us to host their research material.
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