Section 44AD ITA 1961 — PRESUMPTIVE TAXATION for SMALL BUSINESSES — declares profit as a PRESUMED PERCENTAGE of turnover, eliminating need for books:
Answer & Solution
Correct answer: C.
1. Section 44AD Income Tax Act 1961 — PRESUMPTIVE TAXATION SCHEME for SMALL BUSINESSES.
2. ELIGIBLE: businesses with TURNOVER up to Rs 2 CRORE (Rs 3 crore for AY 2024-25 if 95% receipts are non-cash).
3. PRESUMED PROFIT:
4. (a) 8% of turnover (cash receipts);
5. (b) 6% of turnover (DIGITAL receipts).
6. NOT ELIGIBLE: professionals (Section 44ADA), agents, brokers; LLP, companies; persons claiming Section 10A/10B benefits.
7. NO ITC, no further deductions (depreciation deemed allowed).
8. Section 44ADA — PRESUMPTIVE for PROFESSIONALS (gross receipts up to Rs 50 lakh): 50% of receipts presumed as profit.
9. Section 44AE — for GOODS CARRIAGE business: Rs 1,000 per ton per month (light) or Rs 7,500 per heavy vehicle per month presumed.
10. Hence option B is correct.
_Source: CS Executive Paper 4 Tax Laws (ICSI BoS) + Income Tax Act 1961 + CGST Act 2017 — Income Tax Act 1961, Section 44AD_
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