Taxation Discussion

[XRAY27]

Re: General Trading Chat

If that is true, most of the traders will be out of audit as most will fall below 1 Cr turnover.

ST

This is absolute and fact as far as my understanding of IT Act

 

[pratapvb]

Re: General Trading Chat

Dear pratap ji !!!

first this section applies for mandatory turnover of 1 cr !!! if below and there is a loss... then this section does not apply...

for this turnover means always 1 cr or more

I don't know what sections apply but I have been told that if profit is less than 8% of turnover then either deemed income or Audit

in my wife's a/c that I trade small where there was small loss and small turnover I had submitted normal return and the return was sent back re-assessed showing 8% deemed income on turnover ..... though that was still meant tax as zero as it was below slab.... but I know for a fact that this is done by IT

 

[Smart_trade]

Re: General Trading Chat

I don't know what sections apply but I have been told that if profit is less than 8% of turnover then either deemed income or Audit

in my wife's a/c that I trade small where there was small loss and small turnover I had submitted normal return and the return was sent back re-assessed showing 8% deemed income on turnover ..... though that was still meant tax as zero as it was below slab.... but I know for a fact that this is done by IT

My understanding is also same...

ST

 

[XRAY27]

Re: General Trading Chat

I don't know what sections apply but I have been told that if profit is less than 8% of turnover then either deemed income or Audit

in my wife's a/c that I trade small where there was small loss and small turnover I had submitted normal return and the return was sent back re-assessed showing 8% deemed income on turnover ..... though that was still meant tax as zero as it was below slab.... but I know for a fact that this is done by IT

Without seeing the notice i cannot say any thing !!...but i have not received any notice for my clients..

 

[cloudTrader]

Re: General Trading Chat

Dada !!!

Section 44AB read along with section 44AA and then come to section 44AD !!! basing on that at least i cannot sign or do audit U/S 44AD TO is below 1 cr...

for audits under 44AB turnover is the main deciding factor so that same applies to 44AD also !!!!

Bro. as you are a CA yourself , you can have a plus of discussing the matter in your peers as well that will they sign or audit when TO will be less than Rs. 1 Crore just for assessing the understanding of CA's who are not themselves into trading.

 

[cloudTrader]

Re: General Trading Chat

I don't know what sections apply but I have been told that if profit is less than 8% of turnover then either deemed income or Audit

in my wife's a/c that I trade small where there was small loss and small turnover I had submitted normal return and the return was sent back re-assessed showing 8% deemed income on turnover ..... though that was still meant tax as zero as it was below slab.... but I know for a fact that this is done by IT

Dear Pratap bro , if you are comfortable then can you post the official language or part of it which was used by the IT department when the return was sent back. It can be really helpful in clearing the official stance to those who are in a fix about the TO being less than 1 Crore and profit also being less than 8 % of TO.

Thanks.

 

[pratapvb]

Re: General Trading Chat

Dear Pratap bro , if you are comfortable then can you post the official language or part of it which was used by the IT department when the return was sent back. It can be really helpful in clearing the official stance to those who are in a fix about the TO being less than 1 Crore and profit also being less than 8 % of TO.

Thanks.

It was not a notice. It was a re-assesed return. IT dept sents back their version of the calcultion in a 2nd column to the right. In that they had put income = 8% of TO and then recalculated ...

 

[XRAY27]

Re: General Trading Chat

Bro. as you are a CA yourself , you can have a plus of discussing the matter in your peers as well that will they sign or audit when TO will be less than Rs. 1 Crore just for assessing the understanding of CA's who are not themselves into trading.

If that is not the case then every single order in f and o segment needs to be audited ... that is not true at any means !!!

 

[Smart_trade]

Re: General Trading Chat

Posting below extract from Govt's own advance clarifications :

...........
7. Can an assessee adopting the presumptive taxation scheme as provided in section 44AD
declare lower income?
If the actual income from the business covered under section 44AD is lower than the income
prescribed under the presumptive scheme, then the assessee can declare income from aforesaid
business at a lower rate (i.e., at less than 8%).If the assessee does so,i.e.
declares lower income and his actual income exceeds the maximum
amount which is not chargeable to tax, then the relief from maintenance of books of account is
not available and he is required to maintain the books of account as per section 44AA and
further, he has to get such books of account audited as per section 44AB.
Illustration
Mr. Sashank is running a stationary mart. The turnover of the business during the previous year
2012-13 is Rs. 84,48,252. His actual income from this business is only Rs. 5,52,848 which is
less than Rs. 6,75,860 (i.e.,Rs. 84,48,252 * 8%). In this case can he declare actual income
which is lower than the limit prescribed under section 44AD?
**
As per the provisions of section 44AD, if the actual income from the business covered under
section 44AD is lower than the income prescribed under the presumptive scheme, then the
assessee can declare income from aforesaid business at a lower rate (i.e., at less than 8%).
Thus, in this case Mr. Sashank can declare lower income. However, in this case he has to
maintain the books of account prescribed under section 44AA and has to get such books of
account audited as his actual income exceeds the exemption limit (i.e.,Rs. 2,00,000).

Smart_trade

 

[VJAY]

Re: General Trading Chat

Posting below extract from Govt's own advance clarifications :

...........
7. Can an assessee adopting the presumptive taxation scheme as provided in section 44AD
declare lower income?
If the actual income from the business covered under section 44AD is lower than the income
prescribed under the presumptive scheme, then the assessee can declare income from aforesaid
business at a lower rate (i.e., at less than 8%).If the assessee does so,i.e.
declares lower income and his actual income exceeds the maximum
amount which is not chargeable to tax, then the relief from maintenance of books of account is
not available and he is required to maintain the books of account as per section 44AA and
further, he has to get such books of account audited as per section 44AB.
Illustration
Mr. Sashank is running a stationary mart. The turnover of the business during the previous year
2012-13 is Rs. 84,48,252. His actual income from this business is only Rs. 5,52,848 which is
less than Rs. 6,75,860 (i.e.,Rs. 84,48,252 * 8%). In this case can he declare actual income
which is lower than the limit prescribed under section 44AD?
**
As per the provisions of section 44AD, if the actual income from the business covered under
section 44AD is lower than the income prescribed under the presumptive scheme, then the
assessee can declare income from aforesaid business at a lower rate (i.e., at less than 8%).
Thus, in this case Mr. Sashank can declare lower income. However, in this case he has to
maintain the books of account prescribed under section 44AA and has to get such books of
account audited as his actual income exceeds the exemption limit (i.e.,Rs. 2,00,000).

Smart_trade

Dear st da,
If one in loss that year he also need to do audit? as in loss also it comes under 8%...just asking for clarity....