What is 44AD in income tax?
To understand the meaning of 44AD, we need to first understand the meaning of the presumptive scheme.
Small business enterprises or professionals are supposed to maintain books of accounts and they have to get their accounts audited. To give relief from this hectic process an organization can opt for a presumptive tax scheme (PTS). By opting for this scheme neither an organization needs to maintain book accounts nor does they need to audit their accounts. This is known as what is presumptive tax scheme in simple words.
Now, I will explain the meaning of 44AD in income tax.
As we know, in presumptive tax there are three sections that are 44AD, 44ADA, and 44 AE.
Now, I will specifically explain section 44 AE so that you can have a better grasp of this scheme.
Small taxpayers who are engaged in a business can opt for relief under 44AD except for enterprises who are engaged in plying, hiring, and leasing goods carriages.
This scheme cannot be adopted by any non-residents.
You cannot claim deductions under this scheme if you have already claimed exemption under section 10A/ 10AA/10B/10BA or 80HH to 80RRB in the same year.
Any person who earns money through commission or brokerage cannot opt for this scheme under section 44AD.
A person can claim tax under 44AD if the annual turnover does not exceed 2 crores.
A person who has already claimed tax under 44AA cannot claim tax under section 44AD.
I hope you understand now
what is presumptive tax and
what is 44AD in income tax.
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What is presumptive tax?
Sweta
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2022-04-20T17:29:10+00:00 2022-04-21T09:51:19+00:00Comment
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