As per Setion 44AD  small proprietorship and partnership business having turnover upto 2 crore
    need to maintain books of accounts and get accounts audited by CA
   They can straight away show 8%,6% of turnover as Profit and pay Income tax on it


  • Section 44AD Scheme
  • For FY 2016-17 (AY 2017-18) onward
  • If Turnover of Business upto 2 Crore,then
  • 8 % of Turnover is Profit for Cash Transactions
  • 6% of Turnover is Profit for Other Transactions
  • No need to make books of accounts
  • No need to do Audit

What if assesse show less than 8%,6% profit or loss?
It is not allowed as per Section 44AD
He has to compulsorily gets accounts audited and pay tax on it.

This scheme only for Proprietorship and Partnership who are Resident

Suppose a Partnership firm has turnover of 80 lacs ( 20 lacs cash rest in bank)
What is its business Income
How much Income tax he is payable by it?

View Answer



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

View Answer


  1. Practical Income Tax
  2. Income Tax for Small Business

About the Author

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 9 years. He also provides Accounts Tax GST Training in Delhi and Pune.