travel agent 44ad

Section 44AD: Presumptive Taxation for Business

Sakshi Shah

To provide relief to small taxpayers from the tedious task of maintaining books of accounts and getting books of accounts audited, the CBDT introduced the Presumptive Taxation Scheme. Section 44AD of the Income Tax Act provides the provision of the presumptive taxation scheme for businesses. A business with a turnover of up to INR 3 Crore can take the benefit of presumptive taxation under Section 44AD.

Section 44AD: Eligibility

Calculation of presumptive income under section 44ad, income tax on presumptive income under section 44ad, tax audit and books of accounts for presumptive income under section 44ad, section 44ad of income tax: 5 year rule.

The following taxpayers engaged in any business can opt for the Presumptive Taxation Scheme under Section 44AD.

Resident Individual
Resident HUF
A resident partnership firm (not LLP)

The following taxpayers cannot opt for the Presumptive Taxation Scheme under Section 44AD:

Non-Resident Taxpayer
LLP i.e. Limited Liability Partnership
A taxpayer other than an individual, HUF, partnership firm
Taxpayer claiming deductions under Section 10A/ 10AA/ 10B/ 10BA or Section 80H to 80RRB
Business of plying, hiring or leasing of goods carriages under Section 44AE
A taxpayer with agency business
Taxpayer earning brokerage or commission income. Eg: Insurance Agent

To opt for Presumptive Taxation Scheme under Section 44AD, the following two conditions should be satisfied:

The gross sales or turnover of the business should be less than or equal to INR 3 Crore.
The taxpayer should report 6%/8% or more of the gross sales or turnover as income in the ITR.

Note: The prescribed rate of 8% is for non-digital transactions in the business and the rate of 6% is for digital transactions in the business.

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Akshay runs a trading business. The gross sales for FY 2023-24 are INR 1.8 Crore. Sales include cash payments of INR 80 lacs and non-cash payments of INR 1 Crore. Total Purchases are INR 50 lacs. The total expenses are INR 20 lacs which includes a salary, rent, electricity, maintenance, travelling, etc. Can he opt for the Presumptive Taxation Scheme under Section 44AD?

Since the gross sales are less than INR 3 Crore, Akshay can opt for Presumptive Taxation Scheme under Section 44AD.

Pay tax on INR 12,40,000 lacs as per the slab rate.
Do not maintain books of accounts as per Sec 44AA.
Do not go for Tax Audit since the income reported is at least 6% of gross receipts for digital transactions and at least 8% of gross receipts for non-digital transactions.

Income Head and Tax Rate – Income under the presumptive taxation scheme is a business income classified under the head PGBP . Such income is taxable at slab rates as per the Income Tax Act.
Claiming Expenses – Since the taxpayer reports a fixed percentage of gross receipts as income, they cannot claim expenses. However, they can claim deductions under Chapter VI-A . Partner’s remuneration and interest on capital can be claimed as an expense in case of a partnership firm opting for presumptive taxation.
Payment of Advance Tax – Taxpayers opting for a presumptive taxation scheme under Sec 44AD should pay the entire amount of advance tax on or before 15th March of the financial year. If the advance tax payment is not done before the due date, interest under Section 234C is levied. The interest would be levied only if the tax liability exceeds INR 10,000.
ITR Form – Taxpayers opting for presumptive taxation under Section 44AD should report such income as PGBP Income and file Form ITR 4 on the Income Tax Website . They must mention the specified Business and Profession Codes based on the nature of the profession. If the taxpayer has income from capital gains along with presumptive income, they should file Form ITR 3 .

Books of Accounts under Sec 44AA – If a taxpayer opts for a presumptive taxation scheme u/s 44AD and reports income at 6%/8% or more of the gross receipts, They is not required to maintain books of accounts as per Sec 44AA .
Applicability of Tax Audit – If a taxpayer declares income less than 6%/8% of gross receipts and the total income exceeds INR 2,50,000 (basic exemption limit), they should maintain books of accounts and get the books of accounts audited under Section 44AB(e)

As per this rule, if a taxpayer opts for the presumptive taxation scheme in a financial year, they should opt for it for the next 5 financial years continuously. However, if the taxpayer fails to do so, they would not be able to take the benefit of presumptive taxation scheme for the next 5 financial years. For eg: A professional opts for Sec 44AD for AY 2018-19 and AY 2019-20. However, for AY 2020-21, he does not opt for the presumptive taxation scheme. In this case, he will not be eligible to claim the benefit of the presumptive taxation scheme for the next five AYs, i.e. from AY 2021-22 to AY 2025-26.

Yes. If the total tax liability for a financial year exceeds INR 10,000, you must pay advance tax. If you have opted for presumptive taxation scheme u/s 44AD or 44ADA, you are required to pay advance tax on or before 15th March instead of 4 instalments in other cases. However, if you fail to pay advance tax by 15th March of the financial year, interest is Sec 234B and Sec 234C is required to be paid.

A person engaged in a business having gross sales or turnover up to INR 2 Cr has the option to opt for the Presumptive Taxation Scheme under Sec 44AD. They can report 6%/8% or more of gross receipts as income and pay tax on it. If they opt for Presumptive Taxation, they are not required to maintain books of accounts as per Section 44AA. They are also not liable for Tax Audit as per Section 44AB.

Got Questions? Ask Away!

I am a practicing doctor, majority of my receipts are in cash but my gross receipts are less than Rs. 50 lakhs. Can I opt this presumptive taxation scheme?

Hi @Swapnil_Agarwal ,

The condition of cash receipts not exceeding 5% of the gross receipts is applicable only on the enhanced limits of ₹75 Lakhs, so you can opt for presumptive taxation scheme even if your cash receipts exceeds 5% of the gross receipts with total receipts not exceeding ₹50 lakhs.

Hope this helps!!

Hello Niyati, I am working as freelancer for a foreign client. My income would be 60L approximately. Since the income exceeds the limit of 50L but less than 75L can I still opt for sec 44ADA? I have no other source of income.

Hi @Ishwar ,

Yes, you can opt for Sec 44ADA as your income is less than ₹75 Lakhs. The enhanced limits are applicable for the FY 2023-24. Also you will have to check that your cash receipts don’t exceed 5% of the gross income from Freelancing.

Thanks for your reply. I don’t earn any money in form of cash.

Since you won’t be earning any money in form of cash you can opt for Sec 44ADA

Hi @CA_Niyati_Mistry . Thank you so much for your time.

I successfully filed my taxes under 44ADA for AY 22-23. I want to file my tax for AY23-24 now. I have two major questions.

For AY23-25, do I have to pay advance tax (100% of my total tax) by 15th March 2023 or 2024 ? Which year?
If I have to pay it by 15th March 2023, I should go to the income tax website and pay advance tax for AY23-24. But I distinctly remember that for AY22-23, I could file my tax from the normal File Income Tax section where I could select section ADA and fill my information and the website would calculate my tax for me. But when opting for advance tax this year I do not see any such options.

Cleartax has this to say.

Further, anyone opting for this scheme is not bound by the mandate of maintaining books of accounts too. While he is also liable to file his return by 31 July of the assessment year, he must file his return in ITR 4.

They say I have to file it by 31st July 2024. What am I missing? Again thank you for your time!

@CA_Niyati_Mistry I have a thread about this topic here now.

On further research I realised I misunderstood quite a few things.

Please correct me if I’m wrong!

Income tax filing and Advance payment are completely different things. You pay advance tax before 15th March of the financial year and then file your income tax returns in the Assessment year.

Okay it makes sense now. I will make the following assumptions for my timeline. Please let me know if I am correct.

For my FY22-23 income, I should go to the income tax website and pay my estimated advanced tax for the income I earned between 1st April 2022 and 31st March 2023 under AY23-24 . Because I’m eligible for 44ADA, I have the benefit of paying it all in one go before March 15th 2023 instead of paying it in instalments.

Then before 31st July 2023 , I will have to file my income tax return. Neutral case - I won’t have to pay anything when filing my ITR because my estimated advanced tax payment was correct. Worst case - I have to file any difference and pay some more. Best case, my advance tax payment was more and I get a refund.

Are the dates mentioned correct? Are my assumptions right? Thanks again for your time.

Hi @Vivek_Negi ,

Yes, the dates mentioned and the assumptions are correct. Income Tax Return filing and Advance Tax payment are two different concepts. While you file ITR after the PY 2022-23 ends till 31st July, Advance tax is the tax liability that you pay before the year ends. In case of 44ADA only one installment of Advance tax is applicable i.e 15th March where you pay the entire estimated tax liability in one go.

At the time of return filing the income will be calculated again and thus tax liability might differ from what you had determined earlier at the time of Advance tax payment. In case you have paid excess Advance Tax you will receive refund and in case of deficiency you will have to pay tax along with interest.

Hope this clarifies!

so . whether i opt for presumptive or non-presumptive ; advance tax has to be paid as pet the % slabs and as per the dates ! am i right ?

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Last Updated on 5 months by Shreya Sharma

Section 44AD & 44ADA: Presumptive Taxation in 2023

In this article, we are discussing the “Presumptive Tax Scheme” which is a very old Government initiative to reduce the compliance burden of small taxpayers. Two different sections have been framed under the Income Tax Act to provide for the “Presumptive Tax Scheme”:

Section 44ADA: Meant for professionals
Section 44AD: Meant for taxpayers (other than professionals covered u/s 44ADA)

These two sections are quite old sections and the Government has brought amendments in these two sections at frequent intervals to make this scheme more attractive for small taxpayers. This budget i.e. Finance Act 2023 has again brought amendments to the turnover limits prescribed under these sections. That’s why it becomes important to share the amendments with the readers. So, let’s start the discussion over these two sections by covering the recent amendments also.

Presumptive Tax Scheme u/s 44AD

Under Section 44AD, in the case of any eligible assessee who is engaged in an eligible business , an amount equal to 8% of the total turnover or gross receipts or a higher amount as claimed as profit, shall be deemed to be the taxable profits for the purpose of filing of the income tax return.

Therefore, any taxpayer who is eligible u/s 44AD can declare 8% or higher profits on their turnover for taxation purposes. The taxpayer who opts for section 44AD is not required to maintain any books of accounts as required by the law. To boost digital or banking transactions, the Government made a change in section 44AD and prescribed a presumptive rate of 6% in place of 8% which we will discuss below.

Readers would be curious to find answers to their queries relating to section 44AD. Let’s discuss some common questions relating to section 44AD

Who is eligible to opt for the presumptive tax scheme u/s 44AD

An Individual, Hindu Undivided Family (HUF), and Partnership Firm are eligible to opt for section 44AD.
Please note that the taxpayer should be a resident in India to be eligible to opt for the presumptive tax scheme.
A Limited Liability Partnership (LLP) or a Company can not opt for a presumptive tax scheme.
Trusts (AOP/BOI) can not opt for a presumptive tax scheme.

What are the eligible businesses under section 44AD

If you are an eligible assessee according to our previous question and you are engaged in an eligible business, you can opt for a presumptive tax scheme u/s 44AD. According to the section 44AD, the presumptive tax scheme shall not apply to the following businesses:

A person carrying on notified profession (Refer Section 44ADA)
A person earning commission or brokerage income
A person carrying on agency business
A person carrying business of plying, hiring, or leasing goods carriages (Section 44AE)

Therefore, any taxpayer who is carrying on any business other than above, he/she is eligible to take advantage of section 44AD.

What is the rate of presumptive profits under section 44AD

Section 44AD prescribes presumptive profits or gains from the business at the rate of 8% or higher of the total turnover or gross receipts.
However, in case of the total turnover or gross receipts which is received by an account payee cheque or account payee draft or banking channels like NEFT/RTGS/IMPS/UPI, etc., a lower presumptive rate of 6% may also be applied in place of 8%.

What is the turnover limit prescribed under section 44AD

Section 44AD prescribes a turnover limit of INR 2 Crores. It means if the turnover of the eligible business of an eligible assessee is up to INR 2 Crores, he/she can opt for section 44AD. Earlier this limit was INR 1 Crore.
If your total turnover/ gross receipts are more than INR 2 Crore, you are not eligible under section 44AD and you are required to file ITR-3.

Turnover Limit u/s 44AD changed by Finance Act 2023:

To benefit more persons in the small and medium segment, ease of compliance and promote non-cash transactions, Finance Act, 2023 again increased the threshold limits for the presumptive scheme in section 44AD with certain conditions applicable w.e.f. A.Y. 2024-25 and onwards.

Amendment made in Section 44AD by Finance Act, 2023 provides that if you are an eligible assessee carrying on eligible business and where the amount or aggregate amounts received in cash during the year does not exceed 5% of the total turnover or gross receipts, a threshold limit of INR 3 Crores shall apply.

In simple words, if 95% or more of your business turnover is through the banking channel (cheque/RTGS/NEFT/UPI/Card), you can opt for section 44AD up to a turnover of INR 3 crores. Otherwise, the threshold limit of INR 2 crores shall apply.

What are the tax implications of opting for section 44AD

If an assessee is opting for section 44AD, he would not be allowed to make a claim for any expenses or depreciation separately. Any deductions which are allowable under sections 30 to 38 shall be deemed to have been already given full effect and no further deduction shall be allowed under these sections.

Further, in the case of a partnership firm, no separate deduction can be claimed in respect of interest or remuneration to partners.

Author’s Note:

In case the total turnover of the assessee is more than the threshold limit of INR 2 or 3 Crores, the income of the assessee would be computed as per the normal provisions of the Income Tax Act and the assessee would also be required to get his accounts audited under section 44AB.

Presumptive Tax Scheme u/s 44ADA

The benefit of the presumptive taxation scheme was earlier available to traders or manufacturers only. Therefore, to provide relief to small taxpayers who are engaged in the profession, the Government introduced a presumptive taxation scheme for specified professionals through Budget 2016 by inserting section 44ADA. With effect from FY 2016-17, a professional having a gross receipt up to INR 50 Lakhs can avail of the benefit of presumptive taxation under Section 44ADA.

Who can opt for presumptive taxation under section 44ADA of the Income Tax Act

Only Resident Individual or a Partnership Firm who is engaged in a specified profession can opt for a presumptive taxation scheme u/s 44ADA.
Please note that an LLP cannot opt for section 44ADA.

What are the specified professions for the purpose of Section 44ADA

A Resident Taxpayer engaged in any of the following professions can take benefit of the Presumptive Tax Scheme under section 44ADA:

Engineering
Architecture
Accountancy
Technical Consultancy
Interior Decoration
Any other specified profession that CBDT notified:
Film Artists- Cameraman, producer, editor, dance director, actor, director, music director, art director, lyricist, story writer, screenplay or dialogue writer, singer, and costume designer.
Authorized Representatives- A person who represents someone before a tribunal or any legal authority in exchange for a fee. It does not include an employee of the person or a person who is carrying on the profession of accountancy.

What is the rate of presumptive tax under section 44ADA

In case you opt for section 44ADA, you are required to declare profits for an amount equal to 50% or more of the gross receipts as profits or gains from the profession.

What is the turnover limit prescribed under section 44ADA

Section 44ADA prescribes a turnover limit of INR 50 Lakhs. It means a Resident individual or partnership firm who carries a specified profession and having gross receipts up to INR 50 Lakhs can avail of the benefit of Section 44ADA. If your gross receipts exceed INR 50 Lakhs, you cannot opt presumptive tax scheme u/s 44ADA.

Turnover Limit u/s 44ADA changed by Finance Act 2023

To benefit more professionals, ease of compliance and promote non-cash transactions, Finance Act, 2023 has increased the threshold limit for the presumptive scheme in section 44ADA with certain conditions applicable w.e.f. A.Y. 2024-25 and onwards.

Amendments made in Section 44ADA by Finance Act, 2023 prescribe a new turnover threshold of INR 75 Lakhs where the amount or aggregate amounts received in cash during the year does not exceed 5% of the gross receipts.

In simple words, if 95% or more of your turnover is through a banking channel (cheque/RTGS/NEFT/UPI/Card), you can opt for section 44ADA up to gross receipts of INR 75 Lakhs. Otherwise, the threshold limit of INR 50 Lakhs shall apply.

What are the tax implications of opting for section 44ADA

If an assessee is opting for section 44ADA, he would not be allowed to make a claim for any expenses or depreciation separately. Any deductions which are allowable under sections 30 to 38 shall be deemed to have been already given full effect and no further deduction shall be allowed under these sections.

Other Important Remarks about Presumptive Taxation

Head of Income: Income declared under the presumptive taxation scheme is categorized as a business income and thus shown as “Profits & Gains from Business or Profession” in the ITR.
Tax Rate: Income calculated under the presumptive taxation scheme is taxable as per slab rates applicable to the taxpayer.

Claim for expenses & depreciation: The taxpayer declares his/her income at a fixed percentage under section 44AD/44ADA. Therefore, no separate claim for expenses and depreciation shall be allowed to him.

Deductions under Chapter VIA: The taxpayer declaring income under section 44AD/44ADA can claim the deductions under Chapter VI-A. Please note that the Government allows many deductions to the taxpayers under Chapter VI-A.

ITR Form: Taxpayers opting for presumptive taxation under section 44AD/44ADA shall report such income as PGBP income and file his/her ITR in ITR-4 Form. However, if he/she is also having capital gain income in addition to presumptive income, he/she shall file ITR-3 Form.

Advance Tax Payment: Taxpayers opting for the presumptive taxation scheme under section 44AD/44ADA are required to deposit estimated tax on their income in the form of advance tax on or before 15 th March of the financial year. If the advance tax is not deposited before the due date, interest shall be levied under section 234C. The liability to pay advance tax arises only if the estimated tax liability is more than INR 10,000. The taxpayers not opting for a presumptive tax scheme are required to deposit advance tax in 4 installments.

Disclaimer: The above article is meant only for educational purposes and does not carry any persuasive value. Therefore, the readers are advised to act in consultation with any professional before applying the information contained in this article. Taxwink is not responsible for any loss or damage caused to any person on account of any information contained in this article.

About Author: The article is contributed by CA Naveen Goyal who is a qualified Chartered Accountant with an experience of over 16 years in the field of Direct & Indirect Taxes. He is a prolific writer with a zeal to share knowledge on various issues pertaining to taxation laws in India. He can be reached at: [email protected]

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Home » Blog » [FAQs] Computation of Gross Receipts/Turnover | Tax Audit | A.Y. 2023-24

[FAQs] Computation of Gross Receipts/Turnover | Tax Audit | A.Y. 2023-24

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Last Updated on 13 September, 2023

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FAQ 1. How to calculate the gross receipt or sales turnover for a tax audit?

Applicability of tax audit under section 44AB depends upon gross receipts, sales, or turnover of an assessee, so the first and foremost thing is their calculations.

1. Sales turnover

As per ‘Guidance Note on Terms Used in Financial Statement’ published by the ICAI, the meaning of the term’ sale turnover’ shall be aggregate of amount for which sales are affected by an enterprise. The terms gross turnover and net turnover are sometimes used to differentiate the turnover before and after deduction of returns and discounts.

An invoice may involve various extra and ancillary charges. Some of these charges may form part of the sale turnover whereas some may be excluded while determining the value of sales turnover. The treatment thereof is explained in the below table.

2. Gross receipt

The term ‘Gross Receipts’ is not defined in the Income-tax Act. The ‘Guidance Note on Tax Audit’ issued by ICAI provides that in the case of professionals, ‘Gross receipts’ include all receipts arising from carrying on a profession. However, certain receipts may or may not be included in the gross receipts.

The following receipts shall be included in the gross receipts:

Out-of-pocket expenses, recovered by way of consolidated fees, would form part of gross receipts.
Cash assistance (by whatever name called) received or receivable by any person against exports under any scheme of government.
Any duty drawback is payable to any person against exports under specified schemes.
The aggregate gross interest income received by a money lender, commission, brokerage, service, and other incidental charges received in the business of chit funds.
Reimbursement of expenses incurred (i.e., packing, forwarding, freight, insurance, travelling, etc.). However, if the same is credited to a separate account in books, only the net surplus on this account should be added to gross receipts or turnover.
Hire charges of cold storage.
Liquidated damages.
Insurance claims, except those which are linked with fixed assets.
Sale proceeds of scrap, wastage, etc., unless treated as part of sale turnover, whether or not credited to a miscellaneous income account.
Lease rent in the business of operating lease.
Finance income to reimburse and reward the lessor for his investment and services.
Hire charges and installments received in the course of hire purchase.
Advance received and forfeited from customers.
The value of any benefit or perquisite, whether convertible into money or not, arising from business or exercise of a profession.

Following receipts shall be excluded from the gross receipts:

Out-of-pocket expenses recovered separately from the client shall not form part of gross receipts.
Where a professional receives an advance for services that are yet to be rendered, it will not form part of the gross receipts till the services are rendered.
Sale proceeds of fixed assets, including advance forfeited, if any.
Sale proceeds of assets held as investments.
Rental income unless the same is assessable as business income.
Dividends on shares except in the case of an assessee dealing in shares.
Income by way of interest unless assessable as business income.
Reimbursement of customs duty and other charges collected by a clearing agent.
The amount received by travel agents from clients for payment to airlines, railways, etc., is excluded if received by way of reimbursement of expenses incurred on behalf of the client. If, however, the travel agent is conducting a package tour and charges a consolidated sum for transportation, boarding and lodging and other facilities, then the amount received from the members of the group tour should form part of gross receipts.
The amount of advertising charges recovered by an advertising agent from his clients by way of reimbursement shall be excluded. However, if he books the advertisement space in bulk and recovers the charges from different clients, the amount recovered by him will form part of his gross receipts.
Share of profit of a partner in the total income of the firm shall be excluded from the total income of the partner.
Write back amounts payable to creditors or provisions for expenses or taxes no longer required.

In case of sale by a commission agent or by a person on a consignment basis, if the property in goods or all significant risks and rewards of ownership of goods continue to belong to the principal, the relevant sale price shall not be part of the turnover of the commission agent. In this case, the turnover shall be the amount of commission earned by the agent. However, if the property in the goods, significant risk and reward of ownership belongs to the commission agent, the sale price received/receivable shall form part of his turnover.

Read More Sales Turnover or Gross Receipts

FAQ 2. Whether the out-of-pocket expenses received by professionals shall form part of gross receipts?

The expression “gross receipts” in the profession would include all receipts arising from carrying on of such profession. Generally, professionals like solicitors, advocates or chartered accountants receive out-of-pocket expenses in advance and credit it in a separate client’s account to utilise them for making payments for stamp duties, registration fees, travelling expenses, etc., on behalf of the clients. These amounts, if collected separately in advance or otherwise, should not form part of the “gross receipts”. If, however, such out-of-pocket expenses are collected by way of a consolidated fee, the whole of the amount so collected shall form part of gross receipts, and no adjustment shall be made in respect of actual expenses paid on behalf of his clients out of the gross fees so collected.

Furthermore, the advance fees received for which services are yet to be rendered will not form part of the receipts, as such advances are the liabilities of the assessee and cannot be treated as his receipts till the services are rendered.

FAQ 3. How to calculate the turnover of the commission agent?

Turnover of a commission agent or a person selling goods on a consignment basis is determined based on the transfer of significant risk or reward of ownership. If the property in goods or all significant risks and rewards of ownership of goods continue to belong to the principal, the relevant sale price shall not form part of the turnover of the commission agent. In this case, the turnover shall be the amount of commission earned by the agent. However, if the property in the goods, significant risk, and reward of ownership belongs to the commission agent, the sale price received/receivable shall form part of his turnover.

ICDS-IV (Revenue Recognition) also provides that in the case of an agency relationship, the revenue of an agent shall be the amount of commission and not the gross inflow of cash, receivables or other consideration. The CBDT 1 has also clarified that while determining the turnover in case of Kachha Arahtias, the turnover does not include the sales effected on behalf of the principals and only the gross commission has to be considered. However, in the case of Pucca Arahtias, the total sales/turnover of the business should be taken into consideration.

FAQ 4. How to calculate the turnover of a share broker?

When a share broker purchases securities on behalf of his customers, he does not get them transferred in his name, but they are delivered in the name of the customer. The same is true in the case of sales. The share broker holds the delivery merely on behalf of his customer. The property in securities does not get transferred to the share-brokers. Only brokerage, which is being accounted for in the books of share brokers, should be considered for calculating the turnover. However, in the case of transactions entered into by a share broker on his personal account, the sale value should be considered while calculating the sales turnover. The case of a sub-broker is not different from that of a share broker.

FAQ 5. How to calculate the turnover in case of a speculative transaction?

A ‘speculative transaction’ means a transaction in which a contract for the purchase or sale of any commodity or securities is periodically or ultimately settled otherwise than by the actual delivery or transfer of commodity or scrips. Thus, in speculative transactions, both positive and negative differences can arise from the settlement of contracts. Each transaction, whether resulting in a positive or negative difference, is an independent transaction. In such transactions, though the contract notes are issued for the full value of the purchased or sold asset, the entries in the books of account are made only for the differences. Accordingly, the aggregate of both positive and negative differences is considered as the turnover.

For example, Mr X is an assessee engaged in speculative business. He derives the following profits or losses while dealing in securities:

While computing the turnover of Mr X, all the differences, whether positive or negative, shall be aggregated.

FAQ 6. How to calculate the turnover in the case of derivatives?

The Income-tax Act does not contain any provision or guidance for the computation of turnover in F&O trading. Para 5.14(b) of the 2022 GN provided the following guidance on how turnover or gross receipt in respect of transactions in derivatives, futures and options is to be determined:

(a) The total of favourable and unfavourable differences shall be taken as turnover.

(b) The premium received on the sale of options is also to be included in turnover. However, where the premium received is included for determining net profit for transactions, the same should not be separately included.

The above guidance left a lot of doubts. For instance, what is to be done in respect of open positions (i.e., trades not squared up as at year-end and settled in the next financial year)? What if there is a delivery-based settlement in derivative contracts? What about treatment in the hands of the transferor of the underlying asset in case of delivery-based settlement in derivative contracts?

The new guidance in Para 5.10(b) of the 2023 GN provides that the turnover or gross receipt in respect of transactions in derivatives, futures and options is to be determined as follows:

(a) In the case of squared-off transactions, the total of favourable and unfavourable differences shall be taken as turnover.

(b) Premium received on the sale of options is also to be included in turnover. However, where the premium received is included for determining net profit for transactions, the same should not be separately included.

(d) In case of an open position at the end of the financial year (i.e., trades which are not squared off during the same financial year), the turnover arising from the said transaction should be considered in the financial year when the transaction has been actually squared off.

(e) In case of delivery-based settlement in a derivatives transaction, the difference between the trade price and the settlement price shall be considered as turnover. Further, in the hands of the transferor of the underlying asset, the entire sale value shall also be considered as business turnover where the underlying asset is held as stock in trade.

For example, Mr A enters into the following transaction during the financial year 2022-23:

Note 1 – Mr A has an open position in underlying put option as on 31st March 2023. Thus, the turnover from such options shall be computed in the financial year in which the transaction is squared off or settled for delivery.

Note 2 – Delivery-based settlement in a Call (Long) option transaction can be made only if the option is “in the money”, which means the market price (settlement price) is above the strike price (trade price). However, if there is a profit/loss in the option premium amount, then it shall be considered in the calculation of turnover.

Thus, the turnover of Mr A shall be as follows:

Para 5.10(b) of the 2023 GN clarifies that the above guidance for the determination of turnover “is only and only for the purpose of computing ‘turnover’ for tax audit”.

FAQ 7. How to calculate turnover in the case of multiple businesses?

Where an assessee is carrying on more than one business, sale turnover or gross receipts from all businesses shall be clubbed together. However, if the assessee is opting for the presumptive taxation scheme, the turnover of such businesses shall be excluded while determining his total sales turnover or gross receipts.

FAQ 8. How to check the threshold limit if the assessee is carrying on business and profession at the same time?

The ICAI, in the guidance note on tax audit, provides that if an assessee is carrying on a business and a profession, then a tax audit is required if turnover/receipts from either business or profession exceed the prescribed threshold limit.

For example , the professional receipts of an assessee are Rs. 54 lakhs and the total turnover from the business is Rs. 72 lakhs. It will be necessary for him to get the accounts of the profession and business audited because the gross receipts from the profession exceed Rs. 50 Lakhs.

Similarly, if the professional receipts are Rs. 42 lakhs and total turnover from business are Rs. 86 lakh. In this circumstance, as the gross receipt or turnover from a profession or business does not exceed the limits specified in Section 44AB, there is no need to conduct a tax audit.

FAQ 9. Whether GST shall be included while calculating the gross turnover or receipt?

Section 145A provides for the inclusion of taxes, cess, etc., in the value of sale, purchase, and inventory. However, the purpose of this provision is limited to the calculation of income taxable under the head ‘Profits and Gains from Business or Profession’. Whether this provision can be applied to calculate ‘sales turnover’ for Section 44AA, Section 44AB, Section 44AD, and Section 44ADA has always been a matter of disagreement between the revenue and taxpayer.

Where an assessee has opted for the Composition Scheme under the GST Act, the tax is not recovered from the customer and is debited to the statement of profit & loss as an indirect expense. Thus, the amount of GST paid by an assessee does not form part of his gross turnover. In the case of other assessees, as GST is charged from the customer and is recognised separately in the books of accounts, it is not clear whether the amount of GST shall be included in the turnover for calculation of taxable income only (as provided by Section 145A ) or for every other provision which has a reference to ‘turnover’. Unless the CBDT clarifies its stand on this matter, it would be appropriate to ignore the amount of GST while calculating the gross turnover or gross receipts for the following reasons:

Section 145A begins with ‘for the purpose of determining the income chargeable under the head Profits and gains of business or profession’, which makes this provision inapplicable for other purposes.
If GST recovered from the customer is credited to Current Liability Accounts (Output CGST, Output IGST, or Output SGST) and payments to the authority are also debited to the said separate account, these should not form part of the turnover shown in profit and loss account. ICAI’s Guidance Note on Tax Audit also confirms that if tax recovered is credited to a separate account, they would not be included in the turnover.
The inclusion of GST in the turnover would have a cascading effect, as presumptive income would be computed on the component of GST, which is never treated as income of the assessee.

(For detailed analysis and illustrations on the valuation of sale, purchase, and inventory, refer to ‘ Treatment of Tax paid on Goods (Inclusive v. Exclusive Approach )’)

Read More ‘Treatment of Tax paid on Goods (Inclusive v. Exclusive Approach)’

FAQ 10. Mr A, a partner in a firm, has obtained a remuneration of Rs. 12 crores from the firm during the FY 2022-23. Is it mandatory for Mr A to get the accounts audited since the remuneration received from a firm exceeds the specified limit?

Any interest, salary, bonus, commission or remuneration due to or received by a partner from the firm is taxable as his business income under Section 28(v) provided such payments were deducted while computing taxable profits of the firm. The Bombay High Court, in the case of Perizad Zorabian Irani v. PCIT [2022] 139 taxmann.com 164 (Bombay), held that if the assessee was only a partner in a partnership firm and was not carrying on any business independently, remuneration received by the assessee from said partnership firm could not be treated as gross receipts of assessee and, accordingly, assessee was justified in not getting the accounts audited under section 44AB with respect to such remuneration.

The Madras High Court, in the case of Anand Kumar v. ACIT [2020] 122 taxmann.com 252 (Madras), also held that remuneration and interest received by the individual assessee from the partnership firm could not be termed to be a turnover of the assessee.

Based on the above case laws, it can be opined that Mr A is not engaged in independent business activities and is merely a partner in a business conducted by the firm. Consequently, his remuneration from the partnership firm should not be classified as gross receipts or turnover. Hence, he shall not be subject to audit under Section 44AB .

Circular No. 452 dated March 17, 1986

Dive Deeper: [FAQs] Introduction & Applicability of Tax Audit | A.Y. 2023-24 [FAQs] Due Date & Process to File Tax Audit Report | A.Y. 2023-24 [FAQs] Disclosures & Reporting in Form 3CD | Tax Audit | A.Y. 2023-24 [FAQs] Income Computation & Disclosure Standards (ICDS) | Tax Audit | A.Y. 2023-24 [FAQs] Method of Accounting, GST & Ind AS under Tax Audit | A.Y. 2023-24

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11 thoughts on “[FAQs] Computation of Gross Receipts/Turnover | Tax Audit | A.Y. 2023-24”

IN CASE OF PETROL PUMP BUSINESS, THE TURNOVER OF HSD & MS (NON GST GOODS), WHETHER TO BE CONSIDERED FOR CALCULATING AGGREGATE TURNOVER TO FILE GSTR 9 & 9C?????

The definition of the aggregate turnover includes exempt supplies within its scope. Further, the term exempt supplies includes non-taxable supply within its scope.

HOW TO CALCULATE GROSS TURNOVER IN CASE OF PERSON RUNNING CSC OF UNION BANK. HERE , MONEY GETS COLLECTED FROM ONE CUSTOMER SAY INR 100/- , TRANSFERD INR 990 TO ANOTHER I.E. 10/- IS COMMISSION OR SERVICE CHARGES . KINDLY GUIDE WHETHER 100/- IS TURNOVER OR 10/-

Hello Sir, In the given case, the turnover shall be the amount of commission earned by the person from running of CSC i.e. Rs. 10. It is also supported by ICDS-IV (Revenue Recognition) which provides that in the case of an agency relationship, the revenue of an agent shall be the amount of commission and not the gross inflow of cash, receivables, or other consideration.

Hello Sir, Your article says that as per the guidance note issued by ICAI, the advances received by a professional, the services against which are not yet provided shall not be covered in Gross receipts. But when I checked the guidance note 8th edition of 2022, I found the other points but I could not find this point. Can you help to find it?

Please refer to point number 5.19 of page no. 20 from the link: https://resource.cdn.icai.org/70897dtc56864ed.pdf

The company is in service segment, Will tax audit be applicable in case the turnover is 9 Crore and advance for service is 2Cr. considering turnover and receipts exceeding 10Crore

Where an assessee is carrying on both business and profession, then the tax audit is required if turnover or gross receipt from either business or profession exceeds the threshold limit as prescribed under Section 44AB.

The threshold limit for tax audit u/s 44AB is Rs. 1 Crore (for businesses) and Rs. 50 Lakhs (for professionals). The limit for businesses will be extended to Rs. 10 crores if the following conditions are satisfied: a) Cash receipts, including amount received for sales, turnover, or gross receipts, does not exceed 5% of the aggregate amount received during the previous year; and b) Cash payments, including the amount incurred for expenditure, do not exceed 5% of the aggregate amount paid during the previous year.

Further, if a professional received an advance for services which are yet to be rendered, it will not form part of the gross receipts till the services are rendered.

If the company satisfied the conditions of the threshold limit of Rs. 10 crores, in this case tax audit is not required.

Whether GST Collected on Sales to be reported separately in the ITR? If this figure is shown then CPC adds the same to the Turnover to calculate ‘Gross Turnover’ for the purpose of Section 44AB.

Fixed Deposit maturity value can be considered for GROSS RECEIPTS for TAx Audit U/A 44AB

IF PERSON IS ENGAGED IN BUYING AND SELLING TWO WHEELER (BY TAKING TVS-AGENCY ). PERSON EARNING NOMINAL AMOUNT OF PROFIT AND ALSO GETTING COMMISION FROM AGENCY AS WELL AS FROM INSURANCE COMPANY. PLEASE ADVICE ABOUT THE AVAIABILITY OF SECTION 44AB?

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CMA Sajin Odupara (Practicing Cost Accountant) (41 Points)

3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160377 Points) --> Replied 02 June 2018

No. As commission based income......

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CMA Sajin Odupara (Practicing Cost Accountant) (41 Points) --> Replied 02 June 2018

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160377 Points) --> Replied 26 July 2018

Is it possible to subtract commission from the trade? Tickets directly issued by you? No agency.

(& mind it, minimum 6% margin on the turnover !!!)

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Section 194H – TDS on Commission and Brokerage

Updated on : Apr 23rd, 2024

Section 194H of the Income Tax (IT) Act provides for Tax Deduction at the Source (TDS) on commission or brokerage to a resident individual. An individual who pays any commission or brokerage is liable for TDS under section 194H since commission or brokerage serves as a source of income. However, this section also provides certain exceptions where TDS is not deducted on commission or brokerage.

What is Section 194H?

Section 194H is for income tax deducted on any income by way of commission or brokerage, by any person responsible for paying to a resident. From FY 2020-21, individual and HUF whose turnover from business is above Rs 1 crore or gross recipts from profession are above Rs 50 lakh are also required to deduct TDS. Section 194H does not include insurance commission referred to in section 194D.

When does TDS under Section 194H need to be deducted?

TDS under Section 194H will be deducted at the time of credit of such income to the account of the payee or to any other account.
Whether called suspense account or by any other name at the time of payment, of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier.

What is the meaning of commission and brokerage?

Commission or brokerage includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person.

TDS on commission or brokerage includes,

for services rendered (not being professional services), or
for any services in the course of buying or selling of goods, or
in relation to any transaction relating to any asset, valuable article or thing, except securities

Exemption on TDS deduction on commissions and brokerages

Brokerage or commission is less than or equal to Rs.15,000 in a financial year.
The employer is paying a commission to the employee, which is covered under Section 192 of the IT Act.
Commission on insurance and loan underwriting.
Individuals with a NIL TDS certificate from an authorised body will get a TDS exemption for all services.
Charges imposed for warehouse services.
Paying financial corporations under the range of central finance.
Interest from the NRI account.
Payments are made by the Reserve Bank of India (RBI) to any bank.
Brokerage or commission for providing securities to the public.
Income by interest from any savings with the bank and post office.
Commissions imposed on the transaction by using a credit or debit card between an acquirer bank and merchant organisation.
Any payment of commission or brokerage payable by Bharat Sanchar Nigam Limited or Mahanagar Telephone Nigam Limited to their public call office franchisees.
Interest accrued from the NRE account.

In a significant development, the Supreme Court recently held that under Section 194-H of the Income Tax Act, 1961, cellular mobile service providers are not liable to deduct tax at source on income/profit component in payments received by their franchisees/distributors from third parties/customers.

What is the rate of TDS?

The rate of TDS is 5%. The rate was 3.75% for transactions from 14 May 2020 until 31 March 2021. No surcharge, education cess or SHEC shall be added to the above rates. Hence, the tax will be deducted at source at the basic rate. The rate of TDS will be 20% in all cases if PAN is NOT quoted by the deductee.

Under what circumstances TDS u/s 194H is not deductible?

No deduction shall be made under this section in a case where the amount or the aggregate amounts of such income to be credited or paid during the financial year does not exceed INR 15,000
The person can make an application to the assessing officer under Section 197 for deduction of tax at NIL rate or at a lower rate.

What is the time limit on depositing TDS?

Tax Deducted during the month of April to February is to be deposited on or before the 7th of next month. Tax Deducted in the month of March is to be deposited on or before 30th April.
For example, tax deducted on 25 April is to be deposited on or before 7th May and tax deducted on 15 march is to be deposited on or before 30 April.

TDS at a lower rate

The deductee (the person whose tax is deducted) can make an application to the assessing officer under section 197 for deduction of tax at NIL rate or at a lower rate.

Validate the PAN of the deductee submitting 197 certificate.
The Certificate should be valid for the PAN, Section, Rate and relevant financial year which has been mentioned in the statement filed.
Verify that the threshold limit for the certificate has not been exceeded in previous quarters.
Correct certificate number should be quoted in the statement. Example of Correct Certificate Number – 3XXXAH7X

Points to remember about TDS on commission and brokerage

If the commission or brokerage comes under the GST, TDS is deducted from its primary value and is exclusive of the GST component.
TDS is deducted if the aggregate earnings are more than Rs 15,000.
Even if the agent retains the commission amount while setting payment, the TDS will be deposited to the government.
When a TDS deduction is made on behalf of or by the government, it is deposited on the same day.

Related Guides

How to file TDS for the first time using ClearTDS
How to Prepare TDS Return on TaxCloud’s ClearTDS
How to import your Consolidated File to prepare a Correction Statement
How to generate Form 16 (part B) from TDS return?
What happens if I do not file my TDS returns on time?
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Frequently Asked Questions

As per the judgement in CIT v. Singapore Airlines Ltd., where the airlines issued tickets to their travel agents at a concessional price, it was held that the transaction between Airlines and travel agents was that of principal-to-principal, and the price difference was because of discount. Therefore, such a transaction would not fall within the ambit of section 194H.

In Tube Investments of India Ltd. v. ACIT[2009], the taxpayer was a manufacturer of bicycles and was giving trade incentives to dealers. The tribunal held that if dealers were selling goods at the price they were purchasing from the company, such trade incentives would amount to a commission for section 194H.

As per Circular: No. 6/2003, dated 3-9-2003 , TDS under section 194H shall not be applicable on Turnover Commission payable by the RBI to the Agency Banks, i.e. Banks authorised for conducting Government business, for performing the Central and State Governments’ general banking business on behalf of RBI.

TDS under Section 194H shall be deducted at the time of credit of such income to the payee’s account or any account, called by any other name, or at the time of payment by any mode, whichever is earlier.

The tax is deducted at the source at a rate of 5%. If the PAN details are not provided, then a higher rate of 20% is applicable.

From the day the tax was deductible until the date the tax was actually deducted, interest at the rate of 1.5% per month, or part of a month, is payable on the amount of TDS.

Yes, you can deduct all of your expenses from your commission income when you file your income tax return.

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Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

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Dolton ‘super mayor’ tiffany henyard is target of fbi criminal probe, subpoenaed by feds.

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Federal agents have launched a criminal probe into the embattled mayor of a Chicago suburb, Tiffany Henyard, issuing a subpoena to the self-proclaimed “super mayor” last week for a trove of business records and financial reports.

FBI agents served subpoenas to Henyard, who is both the mayor of Dolton and the Thorntown Township Supervisor, at the Thorntown Township Hall on Friday, Fox 32 Chicago reported .

The controversial leader has faced multiple accusations that she has misappropriated taxpayer money to cover her personal expenses including a police security detail as well as unnecessary, lavish travel.

She was hit with two subpoenas — one that focuses on her and her private work and one that revolves around the township, according to the local station which obtained copies.

In the first, the feds are seeking personnel files, wage and tax documents, time and attendance records, contracts and checks written to “cash” from Henyard’s multiple endeavors — a restaurant she owns, a property management company she runs, her political action committee and a charity in her name.

The second subpoena asks for a trove of township financial documents like budgets, payroll records, and ordinances covering credit card purchases, expense reports and reimbursements, security details and use of vehicles, according to Fox 32.

The information the feds are seeking shows that Henyard is the primary target of the criminal probe, former FBI agent Ross Rice told the station.

“It’s very broad in scope. It’s very broad in the number of people and entities they’re asking for records on. So there must be some serious allegations of wrongdoing that they’re trying to get to the bottom of,” said Rice, who reviewed the subpoenas.

Tiffany Henyard selfie in front of president podium

Henyard has come under fire for treating local police akin to her personal security at a $1 million price tag — with local brass saying her requirements have hampered their ability to do their jobs and keep the community safe.

The Dolton village board unanimously voted to begin an investigation into her alleged spending of taxpayer money but Henyard shot down the resolution with a veto last month.

The board then voted to hire former Chicago Mayor Lori Lightfoot , who also served as a federal prosecutor, to investigate Henyard’s spending while also inviting the FBI to open its own probe.

The FBI has reportedly received scores of complaints against the mayor, according to a business owner who took his own complaint against her to an FBI office. Lawrence Gardner, 57, told The Post he informed agents that Henyard shuttered his trucking business because he refused to renew a $3,500 political contribution.

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Trains Moscow to Elektrostal: Times, Prices and Tickets

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Moscow to Elektrostal by train

The journey from Moscow to Elektrostal by train is 32.44 mi and takes 2 hr 7 min. There are 71 connections per day, with the first departure at 12:15 AM and the last at 11:46 PM. It is possible to travel from Moscow to Elektrostal by train for as little as or as much as . The best price for this journey is .

Get from Moscow to Elektrostal with Virail

Virail's search tool will provide you with the options you need when you want to go from Moscow to Elektrostal. All you need to do is enter the dates of your planned journey, and let us take care of everything else. Our engine does the hard work, searching through thousands of routes offered by our trusted travel partners to show you options for traveling by train, bus, plane, or carpool. You can filter the results to suit your needs. There are a number of filtering options, including price, one-way or round trip, departure or arrival time, duration of journey, or number of connections. Soon you'll find the best choice for your journey. When you're ready, Virail will transfer you to the provider's website to complete the booking. No matter where you're going, get there with Virail.

How can I find the cheapest train tickets to get from Moscow to Elektrostal?

Prices will vary when you travel from Moscow to Elektrostal. On average, though, you'll pay about for a train ticket. You can find train tickets for prices as low as , but it may require some flexibility with your travel plans. If you're looking for a low price, you may need to prepare to spend more time in transit. You can also often find cheaper train tickets at particular times of day, or on certain days of the week. Of course, ticket prices often change during the year, too; expect to pay more in peak season. For the lowest prices, it's usually best to make your reservation in advance. Be careful, though, as many providers do not offer refunds or exchanges on their cheapest train tickets. Unfortunately, no price was found for your trip from Moscow to Elektrostal. Selecting a new departure or arrival city, without dramatically changing your itinerary could help you find price results. Prices will vary when you travel from Moscow to Elektrostal. On average, though, you'll pay about for a train ticket. If you're looking for a low price, you may need to prepare to spend more time in transit. You can also often find cheaper train tickets at particular times of day, or on certain days of the week. Of course, ticket prices often change during the year, too; expect to pay more in peak season. For the lowest prices, it's usually best to make your reservation in advance. Be careful, though, as many providers do not offer refunds or exchanges on their cheapest train tickets.

How long does it take to get from Moscow to Elektrostal by train?

The journey between Moscow and Elektrostal by train is approximately 32.44 mi. It will take you more or less 2 hr 7 min to complete this journey. This average figure does not take into account any delays that might arise on your route in exceptional circumstances. If you are planning to make a connection or operating on a tight schedule, give yourself plenty of time. The distance between Moscow and Elektrostal is around 32.44 mi. Depending on the exact route and provider you travel with, your journey time can vary. On average, this journey will take approximately 2 hr 7 min. However, the fastest routes between Moscow and Elektrostal take 1 hr 3 min. If a fast journey is a priority for you when traveling, look out for express services that may get you there faster. Some flexibility may be necessary when booking. Often, these services only leave at particular times of day - or even on certain days of the week. You may also find a faster journey by taking an indirect route and connecting in another station along the way.

How many journeys from Moscow to Elektrostal are there every day?

On average, there are 71 daily departures from Moscow to Elektrostal. However, there may be more or less on different days. Providers' timetables can change on certain days of the week or public holidays, and many also vary at particular times of year. Some providers change their schedules during the summer season, for example. At very busy times, there may be up to departures each day. The providers that travel along this route include , and each operates according to their own specific schedules. As a traveler, you may prefer a direct journey, or you may not mind making changes and connections. If you have heavy suitcases, a direct journey could be best; otherwise, you might be able to save money and enjoy more flexibility by making a change along the way. Every day, there are an average of 18 departures from Moscow which travel directly to Elektrostal. There are 53 journeys with one change or more. Unfortunately, no connection was found for your trip from Moscow to Elektrostal. Selecting a new departure or arrival city, without dramatically changing your itinerary could help you find connections.

Book in advance and save

If you're looking for the best deal for your trip from Moscow to Elektrostal, booking train tickets in advance is a great way to save money, but keep in mind that advance tickets are usually not available until 3 months before your travel date.

Stay flexible with your travel time and explore off-peak journeys

Planning your trips around off-peak travel times not only means that you'll be able to avoid the crowds, but can also end up saving you money. Being flexible with your schedule and considering alternative routes or times will significantly impact the amount of money you spend on getting from Moscow to Elektrostal.

Always check special offers

Checking on the latest deals can help save a lot of money, making it worth taking the time to browse and compare prices. So make sure you get the best deal on your ticket and take advantage of special fares for children, youth and seniors as well as discounts for groups.

Unlock the potential of slower trains or connecting trains

If you're planning a trip with some flexible time, why not opt for the scenic route? Taking slower trains or connecting trains that make more stops may save you money on your ticket – definitely worth considering if it fits in your schedule.

Best time to book cheap train tickets from Moscow to Elektrostal

The cheapest Moscow - Elektrostal train tickets can be found for as low as $35.01 if you’re lucky, or $54.00 on average. The most expensive ticket can cost as much as $77.49.

Find the best day to travel to Elektrostal by train

When travelling to Elektrostal by train, if you want to avoid crowds you can check how frequently our customers are travelling in the next 30-days using the graph below. On average, the peak hours to travel are between 6:30am and 9am in the morning, or between 4pm and 7pm in the evening. Please keep this in mind when travelling to your point of departure as you may need some extra time to arrive, particularly in big cities!

Moscow to Elektrostal CO2 Emissions by Train

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Electrostal History and Art Museum

You can spend time exploring the galleries in Electrostal History and Art Museum in Elektrostal. Take in the museums while you're in the area.

Cities near Elektrostal

Places of interest
Yuri Gagarin Cosmonaut Training Center
Peter the Great Military Academy
Central Museum of the Air Forces at Monino
History of Russian Scarfs and Shawls Museum
Balashikha Arena
Balashikha Museum of History and Local Lore
Bykovo Manor
Pekhorka Park
Ramenskii History and Art Museum
Malenky Puppet Theater
Drama Theatre BOOM
Likino Dulevo Museum of Local Lore
Noginsk Museum and Exhibition Center
Pavlovsky Posad Museum of Art and History
Saturn Stadium
Fairy Tale Children's Model Puppet Theater
Fifth House Gallery
Church of Vladimir
Malakhovka Museum of History and Culture
Orekhovo Zuevsky City Exhibition Hall

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Destinations in 2024.

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Prices at Na Ulitse Yalagina 13B Apartments are subject to change according to dates, hotel policy, and other factors. To view prices, please search for the dates you wish to stay at the hotel. What are the check-in and check-out times at Na Ulitse Yalagina 13B Apartments? The check-in time is after 14:00 and the check-out time is before 12:00.

Cities near Elektrostal. Places of interest. Pavlovskiy Posad Noginsk. Travel guide resource for your visit to Elektrostal. Discover the best of Elektrostal so you can plan your trip right.

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Union Budget 2024

FAQs on Practical Issues in Section 44AA, 44AB, 44AD, 44AE

CA. Rajesh Condoor

1. Who are the persons that are required to compulsorily maintain books of account ? Every person carrying on legal, medical, engineering or architectural profession, or profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the CBDT are mandatorily required to keep and maintain such books of account and documents as may enable the AO to compute his total income in accordance with the provisions of the I.T. Act.

Authorised representatives, Film Artists, Company Secretaries and Profession of Information and Technology have been notified by the CBDT as notified professions.

2. What are the prescribed books of account and documents to be kept and maintained under S.44AA(3) by person carrying on specified profession ? Rule 6F prescribes books of account ot be maintained by specified persons.

6F(2) – professionals

a) Cash book

b) Journal, in case of mercantile system of accounting.

d) Carbon copies of bills serially numbered in case of bills or receipts of Rs. 25/- and more

e) Original Bills and receipts in respect of expenditure. Payment vouchers in case of bills and receipts not issued and the expenditure do not exceed Rs. 50/- (Vouchers may not be prepared if the cash book mentioned contains adequate particulars in respect of expenditure incurred.)

‘Cash book’ means a record of all cash receipts and payments, kept and maintained from day to day and giving the cash balance in hand at the end of each day or at the end of a specified period not exceeding a month.

6F(3)-Medical Professional’s- in addition to above-

a) A daily case register in Form No. 3C

b) Inventory Register of stock of drugs, medicines and other consumable accessories.

3. Where are the specified books of account and other documents to be kept ? Rule 6F(4) states that for other than those relating to a previous year which has come to an end the specified books of account and other documents shall be kept and maintained by the person at the place where he is carrying on the profession or, where the profession is carried at multiple places, at the principal place of his profession.

Where person keeps and maintain separate books in respect of each place of profession carried on, such books and other documents may be kept and maintained at the respective places.

4. For what period should the books of account etc to be kept ? Rule 6F(5)- w.e.f 4-2-2002 the specified books of account shall be kept and maintained for a period of six years from the end of the relevant assessment year.

However, if assessment is reopened u/s 147 within period specified in section 149, then all books and documents which were kept and maintained at the time of reopening shall be retained till the reopened assessment is completed.

5. Whether persons carrying on a non-specified profession or carrying on business are required to compulsorily maintain books of account ? Every person carrying on business or a profession (not a specified profession) whose total income exceeds Rs.1 ,20,000 or his total sales/gross receipts from such business or profession exceeds Rs. 10,00,000 in any of the 3 years immediately preceding the relevant previous year. In case of newly setup business books of account required to be maintained if it is likely to exceed the above mentioned limits.

No specific books and records are specified for the category. However they hare required to maintain such books of account and other documents as may enable the assessing officer to compute their taxable income under Income Tax Act.

6. Will the non maintenance of stock register by an assessee carrying on business amount to contravention of S.44AA ? No books of account were specified by CBDT for the above class of persons. S.44AA provides assessee shall maintain such books of account as will enable the Assessing Officer to compute his business income. Sujan Singh vs AO (2007) 110TTJ(ASR) 818 & ITO v Dinesh Paper Mart 70 ITD 274 (Nag).

7. Will the person carrying on a specified profession whose gross receipt does not exceed Rs.1,50,000 in any one of three preceding previous years be required to maintain books of account ? Every person carrying on a specified profession is required to maintain books of account to enable the Assessing Officer to compute the total income irrespective of his gross receipts in all the three preceding previous years exceed Rs.1 ,50,000. However if his gross receipts in all the three preceding previous years exceed Rs.1 ,50,000 or if it is a new profession and it is likely to exceed Rs.1 ,50,000 in that previous year shall be liable to maintain specified books of account as per Rule 6F.

8. Are assesses covered under S. 44AD & 44AE required to maintain books of account ? An assessee carrying on a business and covered u/s 44AD, 44AE claims that the income from the said business is lower than the deemed profits or gains computed under the above relevant sections, then the assessee shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute the total income in accordance with provisions of I.T. Act.

w.e.f AY 2011-12, where profits and gains of assessee from business are deemd to be profits and gains of the assesssee under section 44AD and claims such income to be lower than the deemed profits and his income exceeds the maximum amount which is not chargeable to income-tax during such previous year, he shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income.

9. What are the consequences of failure to keep accounts ?

S.271A prescribes penalty provisions for failure to keep and maintain books of account, etc., and also for not retaining them for the prescribed period. The quantum of penalty imposable is Rs.25,000.

In Mehta Parvesh v ITO (1998) 60 TTJ 278 (Del –Trib) and in ITO v. Papelal Gaur (1994) 49 TTJ (Nag-Trib) 126 it was held that No penalty can be levied if it is possible for the assessing officer to compute the total income based upon the documents though the books of account were not maintained.

In C.H. Aboobacker Haji v. ITO (2007) 109 TTJ (Coch-Trib) 408, it was held that the assessing officer cannot come to the conclusion that he was unable to compute the income of the assessee due to the non-maintenance of the day book and ledger without completing the assessment. Hence penalty u/s 271 A cannot be levied unless the assessment is completed.

Summary of 44AA:

10. Who are the persons who are compulsorily required to get their accounts audited?

According to S. 44AB, every person carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed Rs.100 Lacs (Rs.60 Lacs upto A.Y. 2012-13) in any previous year, get his accounts of such previous year audited by an Accountant before the specified date and furnish by that date the report of such audit in the prescribed form, duly signed and verified, by such accountant and setting forth such particulars as may be prescribed.In case of a person carrying on profession, the provisions are applicable if his gross receipts in profession exceed Rs.25 Lacs (Rs.15 Lacs upto A.Y. 201 2-1 3) in any previous year.

Further, if any person who is carrying on the business and covered u/s 44AE, 44BB or 44BBB and claims that his income from the said business is lower than the deemed profits and gains shall have to get his accounts audited.

Similarly, every person carrying on the business shall, if the profits and gains from the business are deemed to be the profits an gains of such person u/s 44AD and he has claimed such income to be lower than the profits and gains so deemed to the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year, get his accounts of such previous year be audited.

CEILING ON TAX AUDITS

11. What is the ceiling for Number of tax audit assignments that can be accepted by a CA ? A. As per Notification dated 13.12.1989 published in Part III section 4 of the Gazette of India dt. 04.02.1989 bearing No. 1-CA(7)/3/88 Explanation 1, In the case of a CA in practice or a proprietory firm, 30 tax audit assignments, in a financial year, whether in respect of corporate or non corporate assesses. In the case of a firm of CAs in practice, 30 tax audit assignments per partner in the firm, in a financial year whether in respect of corporate or non corporate assesses.

The limit of 30 tax audits has been enhanced to 45 in the ICAI Central Council’s 268th meeting held from 30th April to 2nd May 2007.

12. Whether audit of branches are counted separately for the ceiling ? A. As per the above mentioned notification, Explanation 4 states the audit of the H.O. and branch office of a concern shall be regarded as one tax audit assignment. As per explanation 5 the audit of one or more branches of the same concern by one CA in practice shall be construed as only one tax audit assignment.

13. When audit for F.Y. 2011-12 and F.Y. 2012-13 are conducted during September 2013, whether both are counted for the ceiling for the no. Of audit assignments during F.Y. 2013-1 4. A. As per the Notification mentioned above, a CA in practice shall be deemed to be guilty of professional misconduct, if he accepts more than 45 tax audit assignments in a financial year.

As per explanation 2 of the above mentioned notification“ in computing the specified number of tax audit assignments each year’s audit would be taken as a separate assignment.

14. Whether audit u/s 44AB (c) and (d) i.e. 44AD & 44AE audits are counted for the ceiling of audit assignments ? A. As per para 9.16 of Guidance Note on Tax Audit u/s 44AB of the Income Tax Act, a member of the institute in practice shall be deemed to be guilty of professional misconduct if he accepts in a financial year more than 30 tax audit assignments or such other limit as may be prescribed by ICAI from time to time u/s 44AB. Further, as per a council decision, audits of accounts of persons carrying on business covered by sections 44AD, 44AE or 44AF or 44BB or 44BBB is not included in the aforesaid limit.

15. How the ceiling is computed in respect of CA partnership firms where the partner is also a partner in another CA firm.

A. As per the 2 nd proviso to the Notification, where any partner of the firm is also a partner of any other firm or firms of CAs in practice, the number of tax audit assignments which may be taken for all the firms together in relation to such partners shall not exceed the specified number of tax audit assignments in the aggregate.

As per the jd proviso to the Notification, where any partner of a firm of CAs in practice accepts one or more tax audit assignments in his individual capacity, the total number of such assignments which may be accepted by him shall not exceed the “specified number of tax audit assignments” in the aggregate

16. Whether Tax audit is applicable for commission Agents. What does CBDT Circular No. 452 clarify ?

A. The CBDT has advised that so far as kachha arahtias are concerned, the turnover does not include the sales effected on behalf of the principals and only the gross commission has to be considered for the purpose of section 44AB. But the position is different with regard to pacca arahtias. A pacca arahtia is not, in the proper sense of the word, an agent or even del credere agent. The relation between him and his constituent is substantially that between the two principals. On the basis of various court pronouncements, the following principals of distinction can be laid down between a kachha arahtia and a pacca arahtia :

(i) a kachha arahtia acts only as an agent of his constituent and never acts as a principal. A pacca arahtia, on the other hand, is entitled to substitute his own goods towards the contract made for the constituent and buy the constituent’s goods on his personal account and thus he acts as a principal as regards his constituents.

(ii) A kachha arahtia brings a privity contract between his constituent and the third party so that each becomes liable to the other. The pacca arahtia, on the other hand, makes himself liable upon the contract not only to the third party but also to his constituents.

(iii) Though the kachha arahtia does not communicate the name of his constituent to the third party, he does communicate the name of the third party to the constituent. In other words, he is an agent for an unnamed principal. The pacca arahtia, on the other hand, does not inform his constituent as to the third party with whom he has entered into a contract on his behalf.

(iv) The remuneration of a kachha arahtia consists solely of commission and he is not interested in the profits and losses made by his constituent as is not the case with the pacca arahtia.

(v) The kachha arahtia, unlike the pacca arahtia, does not have any dominion over the goods.

(vi) The kachha arahtia has no personal interest of his own when he enters into a transaction and his interest is limited to the commission agent’s charges and certain out of the pocket expenses, whereas, a pacca arahtia has a personal interest of his own when he enters into a transaction.

(vii) In the event of any loss, the kachha arahtia is entitled to be indemnified by his principal as is not the case with pacca arahtia.

The above distinction between a kachha arahtia and pacca arahtia may also be relevant for determining the applicability of section 44AB in cases of other type of agents. In the case of agents whose position is similar to that of kachha arahtia, the turnover is only the commission and does not include the sales on behalf of the principals. In the case of agents of the type of pacca arahtia, on the other hand, the total sales/turnover of the business should be taken into consideration for determining the applicability of the provisions of section 44AB of the Income Tax Act .

17. An educational institution not for profit motive having Rs.100.0 Lacs of Gross Receipts is whether liable for tax audit ? What will be the situation if the Gross Receipts exceed Rs.100.0 Lacs ? What will be the effect if it is a Coaching Center ?

A. It is found that the provision of section 44AB shall be applicable only to certain persons who fulfill the following conditions:

(i) must be a person under the Income Tax Act.

(ii) must carry on business or profession.

(iii) must maintain books of account.

(iv) whose profits or gains are from business or profession.

(v) whose profits or gains are computable under Chapter IV.

(vi) whose objects are to earn profit/gain from business/profession and income is taxable or loss allowable under the Act.

(vii) whose income to be lower than the profits or gains so deemed under sections 44AD, 44AE and 44AF.

Where income of assessee is exempt under section 10, then it is not required to obtain audit report under section 44AB and is thus not liable for penalty under section 271B as was held in Asstt. CIT v. India Magnum Ltd. (2002) 81 ITD 295 (Mum-Trib)

In Case the Gross Receipts exceed Rs. 100.0 Lacs the institution needs to obtain registration either under section 12A of the income tax act or under section 10(23)(c)(vi). In case the institution is registered u/s 12A then audit report in Form 10B has to be filed and in case the institution is registered u/s 10(23C)(vi) then audit report in Form 10BB has to be filed.

If the institution happens to be a coaching centre run for profit motive, then audit u/s 44AB needs to be carried out by a Chartered Accountant.

18. Mr. X, an individual has a sole proprietorship firm having turnover of Rs.110.0 Lacs for the financial year 201 2-13 and his taxable income is Rs.1,20,000. Is it mandatory for him to file the return of income for the A.Y. 2011-12. What will be the situation if he incurs loss consisting of business loss of Rs.1,00,000 and Depreciation loss of Rs.50,000 ?

A. Para 6.1 of the revised Guidance Note on tax audit issued by the ICAI states that even if the income of a person is below the taxable limit laid down in the relevant Finance Act of a particular year, he will have to get his accounts audited and to furnish such report under section 44AB, if his turnover in business exceed Rs.100.0 Lakhs.

The existing provisions under sections 1 39(6A) and 271 B allow interpretation contrary to the legislative intent of getting the accounts audited by the specified date. With a view to set the controversies at rest, the provisions of sections 44AB, 139 and 271 B have been recast so as to make them effective. The provisions of section 44AB have been amended to ensure that tax audit is completed by the specified date and the audit report is furnished by that date irrespective of the fact that the return of income has been furnished or not by that date. However, the return whenever furnished shall be accompanied by a copy of the audit report and proof of filing the same by the specified date.

Wherever the audit report has been furnished before filing of the return, non furnishing of a copy of such report along with the return of income will only be a defect under section 139(9) which can be rectified.

Consequential amendments have been made in section 271 B to provide penal action for not getting the accounts audited or failure to furnish the audit report by the specified date. These amendments take effect from 1-7-1995.

No where it has been mentioned that the return shall be filed by an assessee who gets his books of account audited u/s 44AB. But as per section 139, a company, firm needs to mandatorily file its return of income irrespective of the income.

19. A transport contractor having 6 trucks is having gross receipts of Rs.105.0 Lacs for the F.Y. 2010-11. Is he liable for the tax audit ? A. Section 44AB does not contain any condition for tax audit of assessees engaged in transport operations (of goods) where the gross receipt exceeds Rs. 100 lakhs. Only where the assessee offers income below the presumptive limit prescribed in section 44AD or section 44AE, the accounts have to be audited under section 44AB.

The thrust of section 44AE for computing income in the case of assessees engaged in the business of plying, hiring or leasing goods carriages is the number of vehicles and not the aggregate of receipts. In the absence of a provision similar to that of proviso to section 44AD (1) even where the assessee has aggregate annual receipt exceeding Rs. 100 lakhs the accounts need not be audited under section 44 AB so long as the assessee offers income as per the presumptive quantum prescribed in section 44AE. Only where the assessee offers income below the presumptive limit given in section 44AE irrespective of the quantum of receipt, the accounts have to be audited under section 44AB.

20. Mr. A is running a business and his sales for the F.Y. 201 2-13 is Rs.97.00 Lacs. He had interest income of Rs.3.00 Lacs and Rental receipts of Rs.2.00 Lacs and Dividend income of Rs.1 .00 Lac. During the year there was a sale of fixed assets for Rs.5.00 Lacs. Is he liable for the tax audit ? A. As per Guidance note on tax audit issued by the ICAI, the term “gross receipts” is also not defined in the Act. It will include all receipts whether in cash or in kind arising from carrying on of the business which will normally be assessable as business income under the Act. However, following observations of the ICAI are noteworthy.

Items of income not forming part of the term “gross receipts in business”

(a) Sale proceeds of fixed assets

(b) Sale proceeds of assets held as investments

(d) Dividends on shares except in the case of an assessee dealing in shares

(e) Income by way of interest unless assessable as business income

(f) Reimbursement of customs duty and other charges collected by a clearing agent

(g) In the case of a travelling agent, the amount received from the clients for payment to the airlines, railways, etc., where such amounts are received by way of reimbursement of expenses incurred on behalf of the client. If, however, the travel agent is conducting a package tour and charges a consolidated sum for transportation, boarding and lodging and other facilities, then the amount received from the members of group tour should form part of gross receipts. Similar is the case in respect of advertising agent.

Thus the principle to be applied is that if the assessee is merely reimbursed for certain expenses incurred, the same will not form part of his gross receipts. But in the case of charges recovered, which are not by way of reimbursement of the actual expenses incurred, they will form part o his gross receipts as per para 5.12

In view of the above, Mr. A is not liable for tax audit as his turnover has not reached Rs. 100.0 Lacs.

21. Mr. B is having three businesses during the financial year 2012-13. One is a retail business having sales of Rs.80.0 Lacs. He is owning 7 trucks from which receipts were Rs.30.0 Lacs. The other business wholesale and the gross receipts are Rs.35.0 Lacs. Mr. B wants to opt u/s 44AD for the first business and u/s 44AE for the second business. Advice Mr. B whether he is liable for tax audit. What will be the position in case the other business (wholesale) gross receipts are only Rs.1 5.0 Lacs?

A. In cases where the assessee carries on more than one business activity, the results of all business activities should be clubbed together. In other words, the aggregate sales, turnover and/or gross receipts of all businesses carried on by an assessee would be taken into consideration in determining whether the limit of Rs. 100.0 Lacs as laid down in this section has been exceeded or not. However where the business is covered by sections 44AD and 44AE and the assessee opts to be assessed under the respective sections the turnover thereof shall be excluded.

Section 44AB provides that every person carrying on business shall if his total sales turnover or gross receipts, in business exceed Rs. 100.0 Lacs in any previous year get the accounts of previous year audited. If a proprietor carries on multiple businesses the combined turnover of which exceed Rs. 100.0 Lacs then such a proprietor will be required to get his accounts audited as the limit will apply with reference to assessee and not with reference to businesses.

Before introduction of new section 44AD, there were presumptive taxation in respect of 44AF, 44AD and 44AE. If the assessee having turnover more than 60.0 Lacs including the turnover/gross receipts from businesses falling under the category of 44AF, 44AD and 44AE, and if he opts to declare the deemed profits from such businesses, then the turnovers belonging to the presumptive taxation will not be considered for the purpose of arriving at the turnover for audit u/s 44AB.

As per the amended section 44AD only the business u/s 44AE, person earning income in the nature of commission or brokerage or a person carrying on any agency business and a person carrying on profession as referred to in sub-section (1) of section 44AA are not eligible businesses and the turnover from all other businesses (excepting profession, agency, commission or brokerage and 44AE business if assessee opts under presumptive taxation) needs to be clubbed together for arriving at the turnover limit specified u/s 44AB.

In view of the above, Mr. B is liable for tax audit as the total turnover exceed Rs. 100.0 Lacs even after opting for presumptive taxation for income from owning and hiring of trucks under section 44AE. If the gross receipts of the third business are Rs. 15.0 he is not liable for tax audit provided he agrees for an estimated profit of 8% on the aggregate of 1 st and 3 rd business else liable to tax audit u/s 44AB(d)

In case the third business is not a business but profession he will still be liable for audit as the professional receipts have exceeded Rs.25.0 Lacs. If the receipts from profession are only Rs. 15.0 Lacs he will not be liable for the audit provided he declares 8% on the turnover of the first business and declares the deemed profits u/s 44AE for the trucks.

22. Mr. Y’s sales during the F.Y. 2012-13 is Rs.101.0 Lacs which includes Rs.2.50 Lacs of VAT amount collected. Is he liable for Tax Audit ? A. The answer to the question whether VAT collected can be included in the sales for the purposes of section 44AB lies in the method of accounting followed by the assessee. If the VAT collected is included, in the sales then the same will be included. But if the VAT collected is credited to a separate VAT account and payment made to authorities is debited directly to VAT account the the VAT collected may not be included in sales for the purposes of section 44AB. 23. To whom the tax audit is not applicable ? Section 44AB prima facie is applicable only if the assessee has business or profession and the income therefrom is chargeable to tax. Where the income from business or profession is not chargeable to tax then the provisions of section 44AB cannot be applied. Chapter III of the Income Tax Act, 1961, deals with incomes which will not form part of the total income of the assessees. Following are the incomes in respect of which section 44AB will not be applicable.

(i) Agricultural income [Section 10 (1)]

(ii) Any income received by an individual as member of HUF [Section 10(2)]

(iii) Share income of a partner from the firm [Section 1 0(2A)]

(iv) Income of any authority constituted in India by or under any law for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages or for both [Section 1 0(20A)].

(v) Any institution, trust or a society registered under Societies Registration Act, 1860 for the purpose of development of khadi or village industries or both and not for purposes of profit to the extent the income is attributable to the business of production, sale or marketing of khadi or products of village industries [Section 10 (23B)]

(vi) Educational institutions and hospitals not substantially financed by the government even if the aggregate annual receipt exceeds Rs. 40 lakhs provided such institutions are not run for the purpose of profit and are intended to serve solely educational or medical treatment purposes as the case may be. [Section 1 0(23C) (iiiad) and (iiiae)].

(vii) A mutual fund registered under the Securities and Exchange Board of India Act, 1992 and such other mutual fund set up by a public sector bank or a public financial institution as notified by the Central Government (Section 10(23D). Asstt.CIT v. India Magnum Fund (2002) 27 DTC 864 (Mum-Trib) : (2002) 81 ITD 295 (Mum-Trib).

(viii) Exchange Risk Administration Fund set up by public financial institution either jointly or separately as the Central Government may notify in the official gazette. [Section 1 0(23E)]

(ix) Any income of Credit Guarantee Fund Trust for Small Scale Industries being a trust created by the Government of India and SIDBI for a period of five years from the assessment year 2002-03 to 2006-0 7. [Section 1 0(23EB)]

(x) Income of venture capital companies or venture capital funds covered by section 1 0(23FB).

(xi) Income of any corporation established by the Central government for the purpose of promoting the interest of the members of a minority community. [Section 10(26 BB)]

24. Mr. P is having turnover of Rs.120.0 Lacs during the F.Y. 2010-11. He had not maintained the books of account. Whether both the penalties u/s 271 A and 271 B attracts? Advice. Maintenance of accounts is envisaged under section 44AA and on failure to do so the assessee shall be guilty and liable to be penalised under section 271A. Even after maintenance of books of account the obligation of the assessee does not come to an end. He is required to do something more, i.e., by getting the books of account audited by an accountant. But when a person commits an offence by not maintaining the books of account as contemplated by section 44AA the offence is complete. After that there can be no possibility of any offence as contemplated by section 44AB and therefore, the imposition of penalty under section 271B is erroneous. In view of the above, only penalty u/s 271A can be levied. However the income may be estimated by the AO.

25. XYZ & Co., a partnership firm had commenced the business during the F.Y. 2012-13. The purchases during the year are 200.0 Lacs. Sales during the year are Rs.80.0 Lacs. Is the firm liable for tax audit ? A. In the “Guidance Note on Terms Used in Financial Statements”published by the ICAI, the expression “Sales turnover”has been defiened as under: : The aggregate amount for which sales are effected or services rendered by an enterprise. The terms gross turnover and net turnover (or gross sales and net sales) are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts.

Similarly, the following note appears under the heading “sales” in the Statement on Auditing Practices” issued by the ICAI

Sales include sales of all products manufactured by the company including by-products. It is customary to show sales of scrap, etc., under the heading “Miscellaneous Income”. It is important to remember that no adjustment should be made in the Sales Account which does not relate to sales. Similarly adjustment in respect of sales tax and/or excise duty should not normally be made in the Sales Account. Trade discount is a valid deduction from sales but not commission allowed to third parties on sales to customers.”

The Lordship Mrs.Sujata v. Manohar and D.P. Wadhwa J.J dismissed the special leave petition filed by the Department against the judgment dated 27/03/1996 of the Bombay High Court in ITA No. 924 of 1995, whereby the High Court rejected the reference application of the Department on the question whether the Tribunal was right in holding that the return filed by the assessee on 30th October, 1991, for the A. Y. 1991-92 was in time as it was under obligation to get its accounts audited in view of its purchases being in excess of Rs. 40 lakhs and turnover connoted Sales or Purchases?[Chief CIT v. Vijay Maheshwari HUF C.C. No. 7819 of 1997 (228 ITR 157 (SC))].

26. What is meant by turnover, sales & gross receipts ? What is the turnover for a person dealing in shares and derivatives for the purpose of S.44AB.

The word sales , turnover and gross receipts are commercial terms and they should be construed in commercial sense and in accordance with the normal rules of accountancy.

The section refers to the assessee’s total sales, turnover or gross receipts. They should not be of anyone else. If the assessee makes sale and receives the sale price for and on behalf o another, then such a sale may not be taken into account for determining the limit of Rs.100.0 Lacs. (For example assess acting as an agent of another person).

The sales, turnover or gross receipts should be in business of the assessee. If the sale or a receipt is not connected with the business, it is not to be taken into account for determining the limit of Rs.1 00.0 Lacs.

Sales, turnover and gross receipts are not mutually exclusive concepts

For considering the limit of Rs.100.0 Lacs all the three items i.e. sales, turnover and gross receipts should be taken together and not each item separately. The expression gross receipt is wide enough to include sale proceeds and consideration for rendering services. For example, if an assessee effects sales of Rs.95.0 Lacs on his own and he effects sales as the agent of a third party from which he derives gross commission of Rs.1 0 Lacs, then the gross receipts would be Rs.65.0 Lacs and he would be covered by this section.

As per para 5.11 of the Guidance Note on Tax Audit, the turnover or gross receipts in respect of transactions in shares, securities and derivatives may be determined in the following manner:

Speculative transaction : A speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips. Thus, in a speculative transaction, the contract for sale or purchase which is entered into is not completed by giving or receiving delivery so as to result in the sale as per value of contract note. The contract is settled otherwise and squared up by paying out the difference which may be positive or negative. As such, in such transaction the difference amount is turnover. In the case of an assessee doing speculative transaction s there can be both positive and negative differences arising by settlement of various such contracts during the year. Each transaction resulting into whether a positive or negative difference is an independent transaction. Further, amount paid on account of negative difference paid is not related to the amount received on account of positive difference. In such transactions though the contract notes are issued for full value of the purchased or sold asset the entries in the books of account are made only for the difference. Accordingly, the aggregate of both positive and negative differences is to be considered as the turnover of such transactions for determining the liability to audit vide section 44AB.

Derivative, Future and Options: Such transactions are completed without the delivery of shares or securities. These are also squared up by payment of differences. The contract notes are issued for the full value of the asset purchased or sold but entries in the books of account are made only for the differences. The transactions may be squared up any time on or before the striking date. The buyer of the option pays the premia. The turnover in such types of transactions is to be determined as follows:

(i) The total of favourable and unfavourable differences shall be taken as turnover.

(ii) Premium received on sale of options is also to be included in turnover.

(iii) In respect of any reverse trades entered, the difference thereon, should also form part of the turnover.

Delivery based transactions: Where the transaction for the purchase or sale of any commodity including stocks and shares is delivery based whether intended or by default, the total value of the sales to be considered as turnover.

27. The following activities whether fall under business or profession ?

(a) Advertising Agents

(b) Travel Agent

(d) Nursing Home

(e) Insurance Agent

(f) Stock & Share broking

(g) Money lending

(h) Recruiting Agent (i) Person engaged in preparing computer software programming

A. As per para 4.4 of Guidance Note on Tax Audit issued by ICAI, the above activities fall under the category of Business.

28. Mr. S a Cine Artist has receipts of Rs.27.0 Lacs during the F.Y. 201 2-13 as a Cine Actor. He is having a business and his gross receipts during that year are Rs.62.0 Lacs. Is he liable for audit u/s 44AB. What will be your answer in case if his receipts as an Actor are Rs.1 1.0 Lacs and his gross receipts from business are Rs.54.0 Lacs.

A. A question may arise in the case of an assessee carrying on business and at the same time engaged in a profession as to what are the limits applicable to him under section 44AB for getting the accounts audited. In such case if his professional receipts are, say rupees 27.0 lacs but his total sales turnover or gross receipts in business are, say rupees 32.0 lacs, it will be necessary for him to get his accounts of the business audited because the gross receipts from the profession exceed the limit of rupees 25.0 lacs. If however, the professional receipts are, say, rupees 21.0 lacs and total sales turnover or gross receipts from business are say, rupees 84.0 lacs it will not be necessary for him to get his accounts audited under the above section, because his gross receipts from the profession as well as total sales, turnover or gross receipts from the business are below the prescribed limits as per the Guidance Note on Tax audit issued by ICAI.

29. Mr. C is having turnover of Rs.62.0 Lacs during the F.Y. 2011-12. During the F.Y. 201 2-13 his turnover is Rs.98.0 Lacs. He made a payment of interest to Mrs. C amounting to Rs.2,00,000 during the year. Is he liable to deduct tax u/s 194A ? What will be the position if the turnover during F.Y. 2011-12 is Rs.59.0 Lacs and turnover during F.Y. 2012-13 is Rs.102.0 Lacs ?

A. Proviso to sub-section 1 of S. 194A states that “Provided that an individual or a HUF, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under this section.”

In view of the above mentioned proviso, TDS needs to be made by Mr. C for the F.Y. 201 2-13 as the turnover during F.Y. 2011-12 is R.62.0 Lacs which exceeded the limit prescribed u/s 44AB.. In case the turnover for the F.Y. 2011-12 is Rs.59.0 Lacs, TDS need not be made though the turnover during the F.Y. 2012-13 exceeded the limit prescribed u/s 44AB (applicable only for Individuals and HUF).

30. What are the salient features of S.44AD ?

The Salient features of S.44AD are

a. The scheme is applicable only to an Individual, a HUF or partnership firm who is a resident and not applicable to LLP, a company assessee or AOP/BOI etc and also not applicable to non residents and not ordinarily residents. It shall also not be applicable to the eligible assessee availing deductions u/s 1 0A, 1 0AA, 1 0B. 1 0BA and any provision of Chapter VI-A with deductions in respect of certain incomes.

f. Assessee opting for the above scheme shall be exempt from payment of advance tax.g. Assessee opting for the above scheme shall be exempt from maintenance of books of accounts required u/s 44AA. 31. Mr. X has turnover of Rs.100 Lacs. He informs that his income is only Rs.1,20,000. Whether he needs to 1. maintain the books of account 2. Audit his accounts 3. Furnish the return of income. In case if he does not maintain books of account, does not get his accounts audited and does not furnish the return of income, what will be the consequences ?

Upon plain reading of sections 44AA (2) (iv), 44AB (d) and 44AD(5) and from some of the experts view “that an assessee with turnover below 100 Lacs, who shows an income below the presumptive rate prescribed under the provisions, will in case his total income exceeds the taxable limit, be required to maintain books of accounts as per section 44AA(2) and also get them audited and furnish a report of each such audit as required under section 44AB ”. Basing upon the above consideration in respect of the above case, he is not required to maintain books of account, not required to get audit of his accounts and not required to furnish the return of income. (This opinion is not authentic and please do not base upon this opinion for decision making)

32. Mr. Z is having 8 Goods carriage vehicles. He wants to opt 4 vehicles u/s 44AE and get audit for the other 4 vehicles. Advise him.

A. In Dy. CIT v. C.P.Kunhimohammed (2005) 94 ITD 278 (Cochin-Trib), a similar issue was discussed. The assessee having 3 lorries, 2 of them are old and the one being new, wanted to claim the benefit of section 44AE for 2 lorries and normal income scheme for the new lorry. The Tribunal held as below:

There is no provision . which enables an asessee to apply the provisions of section 44AE in the case of some lorries and to go for regular assessment on the basis of books of account in respect of the remaining lorries. As plying hiring or leasing the goods carriages is treated as a separate business, all the lorries owned by the assessee form part of the said business and the tax treatment of all those lorries needs to be an uniform manner.

In view of the above decision, it is possible to say that the assessee cannot claim 44AE method of income determination for 3 lorries and regular method of computation for the other 4 lorries, which are engaged in transport contract.

However, if the assessee has two separate geographic locations of business engaged in transport and there is complete identity between these two businesses with no intermixing, interlacing of funds then it is possible to claim presumptive income scheme for one transport business with some lorries and another transport business on regular basis. However, the basic condition that the assessee should not own more than 10 lorries needs to be satisfied, otherwise the benefit of section 44AE cannot be availed of at all.

—————————-

CA. Rajesh Condoor M.Com , FCA, DISA(ICA)

[email protected]

+91-9885311636

section 44AB
Section 44AD
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46 Comments

can i file ITR under SEC44 ADA for my business i.e from commission and brokerage received from Mutual fund and Insurance ? Can i take simply 50% as expences in such a case? kindly do guide,need Your valuable advice please

PY LOSS CAN C/F U/S 44AD

During last PY Tax audit was applicable on one company having professional income, but this year turnover is less than 50 lakhs, so Tax audit will be done or not??

Fy 2016-17 Stock market trader

Intraday 100 caror turnover (whole year ) Delevary base 70 lakh (whole year ) Fo( call put ) 5 lakh ( 50 hajar lose) whole year

Net income 2 lakh (whole year ) Audit eligible? Please answer ☺

Sir, I am a 89 year old retired person working part time as Quality Consultant in a company. I received a gross amount of Rs. 25000/- per month (Rs 3 Lakh during AY 2016-17). Income tax @ 10% was duly deducted and credited by the company. That is the only income I have for a living. ITR4 form was filled and submitted with the help of a colleague, claiming refund of Rs 30,000/-. But recently IT department have termed it ‘defective’ and asked for Balance sheet and P&L account to be entered. I am at a loss to know this since I do not understand what Balance sheet and P&L can I prepare for the satisfaction of IT department requirements. Can you please help?

Iam a doctor drwing salary from medical college and I am allowed to do private practice in the evening and I also draw pension from state govt. all the in come from all sources can it be clubbed under this 44ae

I HAVE TWO BUSINESS ONE IS TRANSPORT WHICH IS ELIGIBLE FOR 44AE AND OTHER IS MOBILE SHOP THEN HOW COULD I SHOW BOTH BUSINESS IN MY RETURN OF INCOME. AND PLEASE TELL ME WHICH FORM I SHOULD CHOOSE FOR FILE MY RETURN OF INCOME.

If Any salaried employed person receives commission as a part of referral bonus by his builder where referred person has purchase the apartment. referral amount is 30k and builder deducted TDS under section 194H Rs 3K. Now which ITR form to fill.

i own a medical Clinical laboratory

this falls under which category a business or profession

plz respond

Section 44AA (2) defines books of accounts to be maintained for non specified professionals (other than specified professsionals)

Similarly, Under Section 44AB, What would be the limit under which audit is compulsory for non specified professionals.

Please clarify

Sir i have business of 3 trucks (transportation) and with more than 1 house property …so which ITR form is required for me to fill ITR. And can i maintain books of accounts.

And what is different if i have more than 10 trucks…

Please provide me the details.. Thank you … My mail id is [email protected]

Sir i have business of 3 trucks (transportation) and with more than 1 house property …so which ITR form is required for me to fill ITR. And can i maintain books of accounts.

And what is different if i have more than 10 trucks…

Please provide me the details.. Thank you …

Dear Sir, kindly let me know whether mobile game development is an eligible business for applicability of sec 44AD of Income Tax Act

What is the meaning of the term Technical Consultancy as specified under section 44AA? What kind of activities would be included in technical consultancy for it to be classified as a profession?

I have transportation business( Trucks), i dont own those trucks . But i provide service of transportation of cylinders using trucks which i use on paying hire charges. My turnover is less than 1 crore. Can i file u/s 44AD at 8% of my gross receipts?

Is a Partner having no other income other than Profits, Interest and Remuneration from Firm under the head business and Profession is required to maintain books of accounts u/s 44AA if Interest and Remuneration received from Partnership Firm exceeds Rs. 1,20,000/- ?

How is the limit fixed if Firm of Professional Architects, Having 2 Partners and the turnover of firm 38 Lacs

I have a doubt in Q. 27 where you said that:

(i) Person engaged in preparing computer software programming — A. As per para 4.4 of Guidance Note on Tax Audit issued by ICAI, the above activities fall under the category of Business.

But, I am not able to find any other resources in internet that also says that “preparing computer software programming” falls under business. Please clear my doubts.

As the criterion of gross receipts is used for deciding who should be subject to tax audit u/s 44 AB, I would like to question the logic behind clubbing medical and dental practitioners under the same umbrella. While the gross receipts of a medical practitioner does not include cost of materials and lab charges, in dental practice, that is the norm. Hence an exception is to be made for dental surgeons. Alternatively, the criterion of Gross revenue(Gross receipts less direct expenses) should be used.

A Travel Agent(Proprietorship Firm) Which Arrange Transportation for their Clients from Other.He Does Not Own Vehicles But Arrange From Market and Provide to Their Clients. He Get Transportation Services from Market and Provides to Their Clients( Not Acting on Commission Basis)Which of Section 44AD or 44AE Will Apply on Him.Turnover is Less than 100 Lakh.Can He File ITR-4S for A.Y 2014-15 Under Section 44AD,

Thanks & Regards, md.zabiulla

please let me know the definition of turnover as per scetion 44AD

plese let me know the definition of turnover as per section 44AD

I am working as TECHNICAL ADVISOR to a company and receive pay/fees of Rs 1Lakh per month. If my income is lessthan/more than Rs 10 Lakh per financial year, am I to pay service Tax ? When I should maintain accounts.Kindly reply

Sir, I’m an Animator and Visual Effects specialist. Working for Film, Television or any kind of visual presentation on screen. I do banking transaction with name of my XYZ Studios. Sometimes with my saving bank account also. I’m proprietor of this XYZ Studios. I do not have any employee. I’m solo worker. I work as an one man army. My gross receipts in any of the previous three years is about 3 to 6 lakhs. 1. Should I maintain account book ? 2. I use code 0714 for ITR Filling is it right (previously used by a CA) ? 3. please define the limit of gross receipts for compulsory of account book maintenance in my case?

Thank you very much

A Travel Agent(Proprietorship Firm) Which Arrange Transportation for their Clients from Other.

He Does Not Own Vehicles But Arrange From Market and Provide to Their Clients. He Get Transportation Services from Market and Provides to Their Clients( Not Acting on Commission Basis)

Which of Section 44AD or 44AE Will Apply on Him. Turnover is Less than 100 Lakh.

Can He File ITR-4S for A.Y 2014-15 Under Section 44AD,

Thanks & Regards, Jaikumar Singh

An agricalturist incurrs for improvement to agricaltural land by making boundary wall, and land levelling amounting to Rs 40,000 in post babri masjid riot in 1992-93. In the year 2010-11 the land comes within 2 KLm of the town and land becomes liable to capital gain. He sales the land in 2012-13 and earns long term capital gain of Rs.50.00 lacs. Can he claim deuction of cost incurred in 1992-93 in case he does not have any proofs of expenses incurred ? Your considered and valued opinion is sought with legal cases, if any, in this respect. Thanks K D Parekh

Thanks K D Parekh

very Nice sir.. thank you

really enlighening

excellent …thank u

Excellent one…THank you sooo much keep it uppp

Film artist’ means any person engaged in his professional capacity in the production of a cinematograph film whether produced by him or by any other person, as —

(i) an actor;

(ii) a cameraman;

(iii) a director, including an assistant director;

(iv) a music director, including an assistant music director;

(v) an art director, including an assistant art director;

(vi) a dance director, including an assistant dance director;

(vii) an editor;

(viii) a singer;

(ix) a lyricist;

(x) a story writer;

(xi) a screen play writer;

(xii) a dialogue writer; and

(xiii) a dress designer.

But TV/Theatre Actor was not definied under the notified profession of Film artist. Anyhow being a profession the preferred code is 0607. 0906 is for persons carrying on business in the entertainment industry.

Wonderful article. Looking forward for some more articles like this. Thanks and congrats for your article.

WOW, wht a article it has cleared my most of doubts regarding SEC.44 AB

POINT TO BE CONSIDERED Q.21 answer:- “In cases where the assessee carries on more than one business activity, the results of all business activities should be clubbed together. In other words, the aggregate sales, turnover and/or gross receipts of all businesses carried on by an assessee would be taken into consideration in determining whether the limit of Rs. 100.0 Lacs as laid down in this section has been exceeded or not.” this view is not correct, Sec 44AD was substituted by the finance (No.2) act,2009 wef A.y 2011-12.In order to determine whether eligible assessee is eligible to opt for sec. 44AD, the turnover/gross receipt of all businesses should not be clubbed together for applying 60 lakh (1 crore w.e.f a.y 13-14). the limit should be applied business wise. This is clear from the definition of ‘eligible business’ in clause (b) of the Explanation to sec 44AD. The said clause (b) uses the words ‘whose total turnover or gross receipts’. The answer will change when this definition taken into consideration.

The information given is worth reading,while conducting Tax audit . Many Thanks CA, Subhash Chandra Podder , FCA Kolkata 29/07/2013

Very Good, useful

Very informative article. Thanks for sharing

As ceiling fixed by ICAI irrespective of corporates & non-corporates is causing strict hurdle for voluntary compliance under Income-Tax Act, it require more discussion in the article

Dear Rajesh, Thanks for such a Good presentation and a elaborate discussion. VINOD GUPTA

Dear Sir, Very useful. Thanks a lot for this nice post.

Can you please clarify my query – if i am into business ( assuming conditions of sec 44AD are satisfied) and i have more than one house property, will it be possible for me to avail the 44AD route??

( the question arises bcos ITR 4 cant be used for presumptive income and 4S cant be used for more than one house property)

Regards, Krishnakumar K 9003760252 [email protected]

Author have written very good article & explained all facts regarding section 44AA,44AB,44AD,44AE.

FOR ABOVE MENTIONED SECTIONS NEED TO BE AMENDED AS PER INFLATION SINCE 1984.

SECTION 44AB: ACCORDING TO INFLATION SINCE 1984 TO TILL DATE MORE THAN 25 TIMES & AUDIT CEILING SHOULD BE INCREASED FOR NON CORPORATE ASSESSEES MINIMUM 10 CRORE OR PERMANENTLY DELETED FOR NON CORPORATE ASSESSEES.

SECTION 44AD: DUE TO COMPETITION IN BUSINESS TO ACHIEVE 8% NET PROFIT IS DIFFICULT FOR BUSINESSMAN. IT SHOULD BE 3%.

SECTION 44AA: due to inflation estimate scheme should be increased 120000 to 250000.

AS PER CURRENT CONDITIONS THESE CHANGES TO INCOME TAX ACT 1961 ARE MUCH REQUIRED TO SAVE INDIAN SMALL BUSINESSMAN.

I am a film/TV/theatre actor .My gross receipts in any of the previous three years is about 5 to 8 lakhs. Should I use CODE 0607 or 0906 in ITR 4?

very informative, Thank you very much…

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COMMENTS

Section 44AD
Section 44AD (4) will attract the year when the assessee declares the profits less than 8% or 6%. The taxpayer will not be eligible to opt for a presumptive income scheme for the next five years. However, section 44AD (4) will not apply when the taxpayer cannot opt for the presumptive schemes due to non-eligibility.
Travel agencies cah file in itr 4 u/s 44ad
My Client is Doing Tours Travel Businesss can he file in U s 44AD in Incomne Tax For Asst Year 2018 2019 - Income Tax. LIVE GST Audit Course by CA Sachin Jain. ... Travel agent can select ITR-3 without any contradiction.because normally a travel agent have more cash deposit for less profit.no audit required reciving acommissin from agencys only ...
Understanding the Presumptive Tax Regime u/s 44AD for ...
Section 44AD (6) of the Act provides that the provisions of section 44AD shall not apply to: (i) a person carrying on profession as referred to in sub-section (1) of section 44AA of the Act. (ii) a person earning income in the nature of commission or brokerage. (iii) a person carrying on agency business.
Presumptive taxation under Sec 44AD, 44AE and 44ADA for ...
Section 44AD: Section 44AE: 44ADA. Eligible taxpayer: Resident Individual, Resident HUF, Resident Partnership firm (excludes LLPs) and Who has not claimed any profit linked deductions (i.e., Section 10A, 10AA, 10B, 10BA) and deductions under Section 80HH to 80RRB ... Person carrying on agency business; Not applicable: Not applicable: Additional ...
Section 44AD of Income Tax Act: Eligibility, Features, Deductions & How
A few crucial features of Section 44AD of Income Tax Act includes-. A sum equal to or greater than 8% of an individual's total profit or gross receipt is considered as business profit. The 8% rate is reduced to 6% to boost digital transactions and uplift businesses to opt for digital payments, including-. Credit cards. Debit cards.
Section 44AD: Presumptive Taxation for Business
To opt for Presumptive Taxation Scheme under Section 44AD, the following two conditions should be satisfied: The gross sales or turnover of the business should be less than or equal to INR 3 Crore. The taxpayer should report 6%/8% or more of the gross sales or turnover as income in the ITR. Note: The prescribed rate of 8% is for non-digital ...
Provisions of Section 44AD
LEGISLATIVE HISTORY of presumptive taxation in brief. i. Section 44AD is a part of the Presumptive Scheme of Taxation which reads as "Special Provisions for computing profits and gains of business on presumptive basis". ii. Such presumptive taxation u/s 44AD and 44AE was introduced by Finance Act 1994 w.e.f. A.Y. 1994-95.
Presumptive Income Taxation: Section 44AD Explained
ITR filing under presumptive taxation scheme: ITR-4 (Sugam) is the ITR form for taxpayers who opt for a presumptive income scheme u/s. 44AD/44ADA/44AE. However, if the turnover exceeds Rs.2 crore, the taxpayer will have to file ITR-3. Conclusion: Section 44AD of the Income Tax Act 1961 provides a simplified tax approach for eligible taxpayers ...
Presumptive Scheme Under Section 44AD, 44ADA, 44AE
A person who is earning income in the nature of commission or brokerage; A person who is engaged in any profession as prescribed u/s 44AA (1). The presumptive taxation scheme of section 44AD can be exercised only if your total turnover or gross receipts from the business do not exceed Rs. 2 crores for AY- 2023-2024 onwards. However, these ...
Section 44AD & 44ADA: Presumptive Taxation in 2022
Section 44AD applies to all businesses except the business of plying, hiring or leasing goods. Section 44AD won't apply in case of plying, hiring or leasing of goods as these have already been covered under section 44AE. Section 44AD wont apply in case of Agency Business as well as in case of a business earning income from Commission or ...
Presumptive Taxation scheme Section 44AD of Income Tax Act
The presumptive taxation scheme under section 44AD covers all small businesses with total turnover/ gross receipts of up to 2crores (except the business of plying, hiring and leasing goods carriages covered under section 44AE). Restrictions to opt the provisions of presumptive taxation u/s 44AD (6) of the Act.
Section 44AD & 44ADA: Presumptive Taxation in 2023
Turnover Limit u/s 44ADA changed by Finance Act 2023. To benefit more professionals, ease of compliance and promote non-cash transactions, Finance Act, 2023 has increased the threshold limit for the presumptive scheme in section 44ADA with certain conditions applicable w.e.f. A.Y. 2024-25 and onwards. Amendments made in Section 44ADA by Finance ...
Section 44AD
Section 44AD provides an option to the assessee to choose between the normal provisions or opt for the presumptive scheme. The following features of the presumptive income scheme are as:-. As per the provisions of the scheme, a sum equal to 8% of the total turnover or gross receipts of the assessee or a percentage higher than 8% shall be deemed ...
[FAQs] Computation of Gross Receipts/Turnover
If, however, the travel agent is conducting a package tour and charges a consolidated sum for transportation, boarding and lodging and other facilities, then the amount received from the members of the group tour should form part of gross receipts. ... Section 44AD, and Section 44ADA has always been a matter of disagreement between the revenue ...
PDF FAQs on Tax Audit under Section 44AB for AY 2020-21
Section 44AD Resident Individual or HUF . If income of assessee exceeds the maximum exemption limit and ... The amount received by travel agents from clients for payment to airlines, railways etc. are excluded if received by way of reimbursement of ex penses incurred on behalf of the client. If, however, the travel agent is conducting a package ...
Travel agent
2. General commission agent/ commission based agency business (w.e.f, A.Y.2011-2012) 3. Business of playing, hiring or leasing goods carriages. 4. Whose turnover/gross receipt exceeds Rs 60 lacs/1 crore (From A.Y. 2013-2014) So, you can show income from travel business u/s. 44AD and but can not show commission on sale of air ticket.
44AD for Travel agents
44AD for Travel agents. CMA Sajin Odupara (Practicing Cost Accountant) (41 Points) 02 June 2018. Is it possible to opt presumptive Taxation for Travel Agents. 3 Replies. Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160242 Points) Replied 02 June 2018. No.
Section 194H
Section 194H is for income tax deducted on any income by way of commission or brokerage, by any person responsible for paying to a resident. From FY 2020-21, individual and HUF whose turnover from business is above Rs 1 crore or gross recipts from profession are above Rs 50 lakh are also required to deduct TDS.
Elektrostal to Moscow
Drive • 1h 3m. Drive from Elektrostal to Moscow 58.6 km. RUB 450 - RUB 700. Quickest way to get there Cheapest option Distance between.
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RUSSIA TRAVEL PACKAGES A selection of Russian tours to take as they are or adjust to your needs. THE GOLDEN RING Visit the heart of ancient Russia.
FACT SHEET: Biden-Harris Administration Announces Rules to Deliver
Prompt: Airlines and ticket agents must promptly issue refunds within seven business days of refunds becoming due for credit card purchases and 20 calendar days for other payment methods.
Elektrostal Map
Elektrostal is a city in Moscow Oblast, Russia, located 58 kilometers east of Moscow. Elektrostal has about 158,000 residents. Mapcarta, the open map.
Chinese Tourists Are Again Embracing International Travel
The return of China's travelers has long been awaited in the travel industry, which is expected to surpass pre-pandemic levels this year by contributing $11.1 trillion to the global economy. The ...
km travel chesterfield 2024 brochure prices
Please remember that KM Travel may offer much more that just UK holiday tours, UK Coach Tours and city tours so remember to contact the travel agents company using the details below to find out more information. Latest KM Travel Reviews. Transportation (Chesterfield) KM Travel Chesterfield; Chesterfield, United Kingdom. Related places. Get ...
Presumptive taxation- Section 44AD, 44ADA, 44AEAC
An insurance agent cannot adopt the presumptive taxation scheme of section 44AD. A person who is earning income in the nature of commission or brokerage cannot adopt the presumptive taxation scheme of section 44AD. Insurance agents earn income by way of commission and, hence, they cannot adopt the presumptive taxation scheme of section 44AD.
Mira Street, 23, Elektrostal
Moscow Region, Elektrostal, Mira Street, 23, postal code 144007 — view entrances, photos, panoramas and plot a route to the address in Yandex Maps. Find places nearby, check businesses inside and service organizations.
FAQs on Practical Issues in Section 44AA, 44AB, 44AD, 44AE
A Travel Agent(Proprietorship Firm) Which Arrange Transportation for their Clients from Other.He Does Not Own Vehicles But Arrange From Market and Provide to Their Clients. He Get Transportation Services from Market and Provides to Their Clients( Not Acting on Commission Basis)Which of Section 44AD or 44AE Will Apply on Him.Turnover is Less ...

Section 44AD: Presumptive Taxation for Business

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[FAQs] Computation of Gross Receipts/Turnover | Tax Audit | A.Y. 2023-24

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FAQ 1. How to calculate the gross receipt or sales turnover for a tax audit?

1. Sales turnover

2. Gross receipt

FAQ 2. Whether the out-of-pocket expenses received by professionals shall form part of gross receipts?

FAQ 3. How to calculate the turnover of the commission agent?

FAQ 4. How to calculate the turnover of a share broker?

FAQ 5. How to calculate the turnover in case of a speculative transaction?

FAQ 6. How to calculate the turnover in the case of derivatives?

FAQ 7. How to calculate turnover in the case of multiple businesses?

FAQ 8. How to check the threshold limit if the assessee is carrying on business and profession at the same time?

FAQ 9. Whether GST shall be included while calculating the gross turnover or receipt?

FAQ 10. Mr A, a partner in a firm, has obtained a remuneration of Rs. 12 crores from the firm during the FY 2022-23. Is it mandatory for Mr A to get the accounts audited since the remuneration received from a firm exceeds the specified limit?

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Section 194H – TDS on Commission and Brokerage

What is Section 194H?

When does TDS under Section 194H need to be deducted?

What is the meaning of commission and brokerage?

Exemption on TDS deduction on commissions and brokerages

What is the rate of TDS?

Under what circumstances TDS u/s 194H is not deductible?

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TDS at a lower rate

Points to remember about TDS on commission and brokerage

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