Is balance sheet necessary for 44AD?

Since assessee declared return of income under section 44AD of the I.T. Act, therefore, there was no necessity for the assessee to maintain books of account or bills and vouchers of sales and purchase.

Who are not required to maintain books of accounts?

When is bookkeeping not required? Where the income does not exceed Rs 1,20,000 or total sales, turnover or gross receipts are not more than 10,00,000 in all preceding 3 years — no books of account are required to be maintained.

How do I show presumptive income in ITR 3?

The gross receipts from the professional activity during the financial year should be reported at column 62(i). The presumptive income from the professional activity should be reported at column 62(ii), which is required to be computed @ 50\% of gross receipts.

Can you claim depreciation in 44AD?

As per the provisions of section 44AD, from the net income computed at the prescribed rate, i.e., @ 8\%, an assessee is not permitted to claim any deduction under sections 30 to 38 (including depreciation or unabsorbed depreciation) from such income.

How do you maintain accounting records for tax purposes?

Always keep receipts, bank statements, invoices, payroll records, and any other documentary evidence that supports an item of income, deduction, or credit shown on your tax return. Most supporting documents need to be kept for at least three years. Employment tax records must be kept for at least four years.

Which audit is the verification of books of accounts from income tax point of view?

The audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. The audit conducted by the chartered accountant of the accounts of the taxpayer in pursuance of the requirement of section 44AB​ is called tax audit.

What is a presumptive tax?

Presumptive taxation involves the use of indirect means to ascertain tax liability, which differ from the usual rules based on the taxpayer’s accounts.1 The term. “presumptive” is used to indicate that there is a legal presumption that the taxpayer’s.

Which ITR is used for presumptive income?

ITR-4 Form
ITR-4 Form is the Income Tax Return form for the taxpayers who opt for a presumptive income scheme under Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act.

Which ITR for presumptive income and capital gains?

Form ITR-4
Form ITR-4 (Sugam) is a simplified return form to be used by an assessee, at his option, if he is eligible to declare profits and gains from business and profession on presumptive basis under section 44AD, 44ADA or 44AE.

What is the presumptive taxation scheme under Income Tax Act?

As per the Income-tax Act, a person engaged in business or profession is required to maintain regular books of account and further, he has to get his accounts audited. To give relief to small taxpayers from this tedious work, the Income-tax Act has framed the presumptive taxation scheme under sections 44AD, 44ADA and 44AE.

How is the presumptive taxation scheme of Section 44AD computed?

The manner of computation of taxable business income in case of a person adopting the presumptive taxation scheme of section 44AD In case of a person adopting the provisions of section 44AD, income is computed on presumptive basis at the rate of 8\% of the turnover or gross receipts of the eligible business for the year.

What is the manner of computation of taxable business income?

Manner of computation of taxable business income under the normal provisions of the Income-tax Act, i.e., in case of a person not adopting the presumptive taxation scheme of section 44AD Generally, as per the Income-tax Act, the taxable business income of every person is computed as follows:

What are the sources of income for tax purposes?

For a businessman, his net profits will constitute income. Income may also flow from investments in the form of Interest, Dividend, and Commission etc. Infect the Income Tax Act does not differentiate between legal and illegal income for purpose of taxation.