Fire your tax related queries and i would get it solved!!!

[nac]

Though I am not from Commerce background, but I know that IT is taxed on net profit and not gross profit.

Yeah, that's for sure tax is based on net profit. But for tax audit purpose???
We calculate t/o based on gross (sum of gross profit and sum of gross loss of each trade).

 

[niftygupshup]

Yeah, that's for sure tax is based on net profit. But for tax audit purpose???
We calculate t/o based on gross (sum of gross profit and sum of gross loss of each trade).

It should be on the basis of net profit only, if you claim expanses like internet charges, electricity, data fees and other such expanses related with trading. If you do not claim for such expanses then GP will become NP, as there is/are no expanse(s).
But a clarification from experts is needed, as we calculate TO on the basis of gross profit and gross loss.

 

[canikhil]

Can we jump return if the previous return has considered invalid?
Just ignore this year return and file the return or audit next year,possible?
2014-15-Return filed
2015-16-no return filed
2016-17-return filed
2017-18-no return filed
2018-19-no return filed
2019-2020-return filed

like this,is valid Sir?

I cannot suggest not filing tax returns or leaving 139(9) notices unattended.

 

[canikhil]

It should be on the basis of net profit only, if you claim expanses like internet charges, electricity, data fees and other such expanses related with trading. If you do not claim for such expanses then GP will become NP, as there is/are no expanse(s).
But a clarification from experts is needed, as we calculate TO on the basis of gross profit and gross loss.

Honestly, I don't understand why there is so much confusion going on here. You guys don't question your CA at all?

It is a simple rule, Get your turnover done computed as per ICAI guidelines. Where this turnover is less than the 44AB limit (Rs 2cr from FY 2016-17), the net profit has to exceed 8% of this turnover to avoid audit (there is another condition that overall income needs to exceed the basic exemption limit). This 8% profit is assumed to include all the deductions including depreciation.

With regards GP vs NP discussion, Income-tax just tax profits computed as per the provisions of the Act. GP/NP are just accounting jargons. It doesn't tax the net profit as reflected in the Profit and Loss Sheet, it taxes the profit as per BP sheet.

 

[nac]

You guys don't question your CA at all?

the net profit has to exceed 8% of this turnover to avoid audit (there is another condition that overall income needs to exceed the basic exemption limit). This 8% profit is assumed to include all the deductions including depreciation.

Sorry, if I annoyed with a silly question.

I have been filing ITR for the last 3yrs and haven't been in that situation (posting profit), so it didn't strike my mind to ask this question to my CA.

Thanks for clarifying.

 

[canikhil]

Sorry, if I annoyed with a silly question.

I have been filing ITR for the last 3yrs and haven't been in that situation (posting profit), so it didn't strike my mind to ask this question to my CA.

Thanks for clarifying.

Not at all. Anyways my comment was general in nature. You guys need to ask your CA a lot of questions before the return is filed. Specially now when many in this forum are suggesting that they should file return under 44AD without realizing that the new amendments would bind them to such an opinion for next 5 years.

 

[Kashasathi]

Not at all. Anyways my comment was general in nature. You guys need to ask your CA a lot of questions before the return is filed. Specially now when many in this forum are suggesting that they should file return under 44AD without realizing that the new amendments would bind them to such an opinion for next 5 years.

44AD is from FY 2016-17,AY 2017-18 or is it active from last year FY 2015-16,AY 2016-17??

 

[canikhil]

44AD has been for years...The new amendments to it are effective from FY 2016-17 ie AY 2017-18.

 

[Kashasathi]

44AD has been for years...The new amendments to it are effective from FY 2016-17 ie AY 2017-18.

ohh that means I'm saved.my local auditor friend filed under 44AD only.
new amendment is confusing,I will file return under 44AD in FY 2016-17 ie AY 2017-18,but after that I may attract audit under 44AB in FY 2017-18 ie AY 2018-19,then what should one do?
we even dont know how much are we going to earn as a trader by this March end.so,under which section one should file a return if 44AB is not applicable?

 

[carnot11]

Honestly, I don't understand why there is so much confusion going on here. You guys don't question your CA at all?

It is a simple rule, Get your turnover done computed as per ICAI guidelines. Where this turnover is less than the 44AB limit (Rs 2cr from FY 2016-17), the net profit has to exceed 8% of this turnover to avoid audit (there is another condition that overall income needs to exceed the basic exemption limit). This 8% profit is assumed to include all the deductions including depreciation.

With regards GP vs NP discussion, Income-tax just tax profits computed as per the provisions of the Act. GP/NP are just accounting jargons. It doesn't tax the net profit as reflected in the Profit and Loss Sheet, it taxes the profit as per BP sheet.

Dear Sir,

When you say BP sheet ---- I assume you mean BL sheet (Balance sheet). Please correct me if wrong.

Enjoy,
CArnot