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SECTION 44AD

Special provisions for computing income under sections 44AD


Sec.44AD is applicable only if following conditions are satisfied
Eligible Assessee-
Eligible assessee for this purpose is a
resident individual,
a resident HUF or
a resident partnership firm(not being a limited liability firm)
Has not claimed some deductions-
The assessee has not claimed any deduction under sections 10A, 10AA,
10B, 10BA, 80HH to 80RB in the relevant assessment year
Eligible business
The assessee should be engaged in any business except the business of
plying, hiring or leasing goods carriage referred to in section44AE
Turnover
Total turnover/gross receipts in the previous year of the eligible business
should not exceed Rs.60 lakh.
Consequences if Section 44AD is Applicable
If the above conditions are satisfied, the income from the eligible business is estimated at 8%
of the gross receipt or total turnover
All deductions under section 30 to 38, including depreciation & unabsorbed depreciation are
deemed to have been already allowed and no further deduction is allowed under these
sections.
An assessee opting for the above scheme shall be exempted from payment of advance tax
related to such business
An assessee opting for the above scheme shall be exempted from maintenance of books of
account related to such business as required under section 44Aa
Is it possible to declare lower income A taxpayer can declare his income to be lower than
the deemed profits and gains
The following consequences are applicable if the taxpayer declares his income to be
lower
The taxpayer will have to maintain the books of accounts as per section44AA if his
total income exceeds the exemption limit.
The taxpayer will have to get his books of accounts audited under section 44AB if
his total income exceeds the exemption limit.

SECTION 44AE
In the case of taxpayers engaged in the business of plying, leasing or hiring trucks.
Broad features:
Applicable to an assesse who owns not mopre than 10 goods carriages at any time
during previous year.
Profit & Gains for such goods carriage are,
o Heavy Goods Vehicle Rs. 5000 for every month or part of a month during
which vehicle is owned.
o Other Goods Rs. 4500 every month or part of month during which vehicle is
owned
Assessee may declare a higher incone than the specified above

Consequences if presumptive income scheme is opted
All deductions under section 30 to 38 including depreciation and unabsorbed depreciation,
are deemed to have been already allowed and no further deduction is allowed under this
section
Turnover of this business not to be included for computing limit of section 44AA & 44AB
Consequences if presumptive income scheme is not opted
Assessee may choose not to opt for the scheme and may declare income lower than the specified
amount and needs to maintain books of account.(similar to sec 44ad)