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Asked on July 28, 2020, 6:58 p.m.
Answered on July 28, 2020, 7:29 p.m.
What is the meaning of presumptive taxation scheme?
You know maintaining books of accounts is a tedious and a little complex task at least for a small business. It dilutes the focus of a small business person. Instead of focussing on his (her) business, he gets busy in tax chores.Tax authorities understand it. And thus, in the interest of small businessman and nation they have devised a special scheme "Presumptive taxation scheme."Presumptive taxation scheme is a scheme which permits small taxpayers to not maintain the regular books of accounts.A person adopting the presumptive taxation scheme can declare income at a prescribed rate and, in turn, is relieved from tedious job of maintenance of books of account. For the small tax payer the relevant presumptive taxation scheme sections are 44AD, sections 44ADA, sections 44AE, Section 44BB and Section 44BBB. • Section 44AD : Computation of income on estimated basis in the case of taxpayers [being a resident individual, resident Hindu undivided family or resident partnership firm (not being a limited liability firm] engaged in certain business subject to certain conditions. • Section 44ADA : Computation of professional income on estimated basis for assessee being a resident in India and engaged in a profession referred to in section 44AA(1) subject to certain conditions. • Section 44AE : Computation of income on estimated basis in the case of taxpayers (being an Individual, HUF, AOP, BOI, Firm, Company, Co-operative society or any other person may be resident or non-resident) engaged in the business of plying, leasing or hiring goods carriages, subject to certain conditions. • Section 44BBB : Computation of profits and gains of foreign companies engaged in the business of civil construction, subject to certain conditions. The other presumptive taxation scheme sections are:• Section 44B : Taxation of shipping profits derived by a person being a non-resident in India, subject to certain conditions. • Section 44BB : Computation of taxable income of a person being a non-resident (may be an India citizen or a foreign citizen) from activities connected with exploration of mineral oils, subject to certain conditions. • Section 44BBA : Computation of income in respect of foreign airlines, subject to certain conditions.PS: As per sections 44AA of the Income-tax Act, 1961, a person engaged in business or profession is required to maintain regular books of account under certain circumstances.
Asked on April 7, 2020, 6:57 p.m.
Answered on April 7, 2020, 7 p.m.
Mr Hansh deals in sale and purchase of lands and buildings. He holds various lands and buildings as stock in trade.Please advise while calculating Hansh's income can we ignore the Stamp Duty Value (SDV) of the property and use the actual consideration received only?
No, you can't ignore SDV.
Asked on April 7, 2020, 6:42 p.m.
Answered on April 7, 2020, 6:43 p.m.
Ravi Limited took over the stock in trade from Shankar Limited after revaluing it at the fair market value at Rs 7 lakhs (previously held by Shankar Limited at cost Rs 6 lakhs) when Ravi Ltd and Shankar Ltd amalgamated in to Ravi Limited.If Ravi Ltd (amalgamated) sells this stock in trade for Rs 8 lakhs, the Cost of stock in trade shall be computed at Rs ___________?
Rs 6 lakhs, being the cost of the asset for Shankar Limited.
Asked on April 5, 2020, 6:08 p.m.
Answered on April 5, 2020, 6:18 p.m.
Mr Hari heard somewhere that:"An employer can claim the deduction in respect of gratuity only in the year in which the gratuity is actually paid"Would you say Mr Hari heard it correct?
Yes, Hari has rightly heard. He can claim gratuity deduction in the year he pays gratuity.