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(As per Section 44AD)
In case of small business
There is no need to maintain books of accounts and get accounts audited by CA
They can straight away show 8% of turnover as Profit and pay Income tax on it

Note:-8% is Minimum Profit to be shown, Assessee can show more than 8% profit also

What if assesse show less than 8% profit or loss?
It is not allowed as per Section 44AD
He has to compulsorily gets accounts audited and pay tax on it.
Note:-
This Scheme is applicable for Small business whose turnover is upto 1 crore(For Financial Year 2016-17,limit is increased to 2 Crore )
This scheme only for Proprietorship and Partnership who are Resident

Q1 A
Suppose a Partnership firm has turnover of 80 lacs
What is its business Income
How much Income tax he is payable by it?

View Answer

Q1 B

Can it pay Interest and Salary to Partners to reduce its tax liability?

View Answer

Q1C

Suppose in Q1A,Salary paid to both working partners 250000 each
What is Maximum Salary it can give to 2 Partners as per Section 40(b)?

View Answer

Q1D

What is tax payable by Partnership firm in this case

View Answer

 

  1. Income Tax
  2. PGBP Income
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CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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