Can I opt for Presumptive taxation 44AD in this case

Thank you @Quicko for clear clarifications.

This helps :+1:

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Where is it written under 44AD “whichever is higher” has to be declared as income?

It however says “sum higher than the aforesaid sum claimed to have been earned by the eligible assessee “. Here the assessee has option to claim that he/she has earned more than 6 or 8% of turn over.
Where does it mandates declaring actual profit at all? Please be specific with reference from existing law and judgements?

Also, on opting 44AD, no further deductions are available under section 30 to 38 of IT Act. Then what is the logic behind declaring actual income under 44AD when you are not getting deductions benefits?

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@Quicko please confirm if this is true for section 44AD? For this FY (2023-24)

There is a condition to it. all the transactions should be done via banking channels.

Hey @entice,

Yes, the turnover limits have been updated in Budget 2023 and will be applicable for FY 23-24.

I have one question…If we take section 44AD for share market income and show profit at let suppose 9 percent and actual profit is way more than that…How Income tax will know about it…We are not suppose to maintain any books of accounts…Even if we can get Actual income from broker…How income tax authority can compute actaul expenses as bank stat will have personal and business related expenses both in same statement and we are not rquired to maintain books under 44AD…So there is no way itr authority can compute actual expenses that too after many years later…What is your take in this.

Income tax authorities will get all info from your demat accounts.

But how will they get info of expenses as we are not required to maintain books of accounts

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If an assesse is not suppose to maintain books of account under section 44AD then how will he able to determine actual profit… even if we can determine actual profit form brokers report , but then why we are suppose to compute actual expenses incurred as there is no requirement of maintaining books of accounts

Hey @Sumit_Lehri

The assessing officer may retrieve the data on profit from the broker statement. In case you want to claim the expenses, it is your liability to submit the proofs in case of any scrutiny.

In failure to do so, the AO may pass the order assessing the profit as your income.

You can also connect to a tax professional for a second opinion on the same.

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@Quicko If a trader wants to do it right and maintains books as well such that CA can audit and certify it, what needs to be done apart from Broker’s PnL statement we have?

What i keep hearing from C.A is they required to prepare balance sheet of all the accounts a trader has even when they are not linked with Broker is this true?

So the question simply put, we want to follow all laws and CA audits no section 44AD etc what all should a trader maintain to make things right at the end of financial year…?

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Can you please give me a link on income tax website that says it has to be 6 or 8% of total turnover or actual profit ???

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Hey @curiousvi,

It is always recommended to disclose your actual income even if you opt for the presumptive taxation scheme.

You can also connect to a tax professional for a second opinion on the same.

Hope this helps!

Did you read what I requested? give me a link on reliable website that mentions the law — where it says - either 6% of turnover or actual income whichever is higher

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