| TMI Short Notes |
Deemed profit u/s 44AD - existing rate of deemed total income of 8% reduced to 6% in case of total turnover or gross receipts which is received through banking channel - Budget 2017-18 w.e.f. AY 2018-19 |
Clause - 021 - Amendment of section 44AD. Clause 21 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. The provisions contained in the said section (as amended by the Finance Act, 2016), provides that notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, having total turnover or gross receipts not exceeding two crore rupees, a sum equal to eight per cent. of the total turnover or gross receipts of the assesse in the previous year on account of such business, or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "profits and gains of business or profession". It is proposed to insert a proviso to the said sub-section (1) so as to reduce the existing rate of deemed total income of eight per cent. to six per cent., in respect of the amount of total turnover or gross receipts which is received by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account during the previous year or before the due date specified in sub-section (1) of section 139 in respect of that previous year. However, the existing rate of deemed profit and gains of eight per cent. referred to in the provisions of the said section, shall continue to apply in respect of total turnover or gross receipts received in any other mode. This amendment will take effect from 1st April, 2017 and shall accordingly, apply in relation to assessment year 2018- 2019 and subsequent years.
Dated: 3-2-2017
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