Thank you @Quicko for clear clarifications.
This helps 
1 Like
Where is it written under 44AD âwhichever is higherâ has to be declared as income?
It however says âsum higher than the aforesaid sum claimed to have been earned by the eligible assessee â. 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?
1 Like
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 questionâŚIf we take section 44AD for share market income and show profit at let suppose 9 percent and actual profit is way more than thatâŚHow Income tax will know about itâŚWe are not suppose to maintain any books of accountsâŚEven if we can get Actual income from brokerâŚHow 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 44ADâŚSo there is no way itr authority can compute actual expenses that too after many years laterâŚWhat 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
1 Like
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.
1 Like
@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 Brokerâs 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�
1 Like
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 ???
1 Like
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 â where it says - either 6% of turnover or actual income whichever is higher
1 Like
Their whole argument seems flawed, the basic reason for presumptive taxation is to do away with the need for accounting, the 6% amd 8% limit is there because it is automatically assumed that the other 94 or 92% are expenses and even court verdict has said if the person is forced to give the breakdown of that 92% expenses then the whole notion of presumptive taxation is defeated. Yes broker can give our profit bt it can not state our expenses. Which ideally should be deducted from the income to calculate tax liability.
2 Likes
Hey @Anshul_bishnoi @curiousvi,
There can be different views and opinions on this matter. The Income-tax utility mentions that you have to report either 6% of your turnover or actual profits, whichever is higher when you are opting for the presumptive taxation scheme. Hereâs a screenshot for your reference:
Understood. Thankyou for the clarification.
@Quicko
These IT guys have a knack of keeping it vague 
âAmount claimed to have been earnedâ instead of âAmount earnedâ
Makes it seem like a choice, like its a donation 
Where did you get this image/screenshot ? do you have any website link to go to ?
Hey @curiousvi,
This is from the income tax utility. If you file your ITR on the Income Tax Portal and go for the presumptive taxation scheme, youâll be able to see the screen.