Amendment of section 44AD.
14. In section 44AD of the Income-tax Act,—
(a) after sub-section (5), and before the Explanation, the following sub-section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2011, namely:—
“(6) The provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to—
(i) a person carrying on profession as referred to in sub-section (1) of section 44AA;
(ii) a person earning income in the nature of commission or brokerage; or
(iii) a person carrying on any agency business.”;
(b) in the Explanation, in clause (b), in sub-clause (ii), for the words “sixty lakh rupees”, the words “one crore rupees” shall be substituted with effect from the 1st day of April, 2013.
Notes on Clauses:
Clause 14 of the Bill seeks to amend section 44AD of the Income-tax Act relating to special provision for computing profits and gains of business on presumptive basis.
It is proposed to insert a new sub-section (6) to the aforesaid section 44AD so as to provide that the provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to (i) a person carrying on profession as referred to in sub-section (1) of section 44AA; (ii) a person earning income in the nature of commission or brokerage; or (iii) a person carrying on any agency business.
This amendment will take effect retrospectively from 1st April, 2011 and will, accordingly, apply in relation to the assessment year 2011-2012 and subsequent assessment years.
The existing provisions in clause (b) of the Explanation to the aforesaid section 44AD defines the term “eligible business” to mean any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE and whose total turnover or gross receipts in the previous year does not exceed sixty lakh rupees for the purpose of computing profits and gains of business on presumptive basis.
It is proposed to amend the aforesaid Explanation so as to enhance the said limit from sixty lakh rupees to one crore rupees.
This amendment will take effect from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013-2014 and subsequent assessment years.
