{"id":373,"date":"2023-07-20T12:23:13","date_gmt":"2023-07-20T06:53:13","guid":{"rendered":"https:\/\/total-sols.com\/blog\/?p=373"},"modified":"2023-07-21T10:56:20","modified_gmt":"2023-07-21T05:26:20","slug":"tax-saving-all-the-way-small-business-manufacturing-trading-services","status":"publish","type":"post","link":"https:\/\/total-sols.com\/blog\/tax-saving-all-the-way-small-business-manufacturing-trading-services\/","title":{"rendered":"Tax Saving all the way \u2013 Small business \u2013 Manufacturing, Trading &#038; Services"},"content":{"rendered":"\n<p><strong>Highlights of Section 44(AD), Presumptive Tax:<\/strong><\/p>\n\n\n\n<p>Taxable limits for Section 44(AD) for FY 2023-24, 2024-25 is\n3 Crores.<\/p>\n\n\n\n<p>A new condition has been introduced wherein a minimum of 5\nyears to be continued for Presumptive Tax benefits under Section 44(AD).&nbsp; If in the event, you switch over to regular\nbusiness, the Presumptive benefits will be disallowed for a period of 5 years\nfrom the year of switching to normal tax filing.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>6% net income on digital receipts. <\/li><li>8% on cash receipts. <\/li><li>Did not maintain accounting records. <\/li><li>No need to pay advance tax. <\/li><li>No need of Audit of books of accounts.<\/li><\/ul>\n\n\n\n<p>ITR-4 can be filed instead of ITR-3. &nbsp;If Gross revenue above prescribed limit then\ntaxable under sec 44(AD).&nbsp; If the\nIndividual\/HUF\/Partnership\/Firm has multiple businesses, gross receipts should\nbe clubbed.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Section 44(AD) is applicable to\nIndividuals\/Proprietorship\/HUF &amp; Partnership. <\/li><li>Business of Transportation, Hiring, Liaisoning\nof Goods, Garages cannot adopt this provision as referred in Sec 44(AE).<\/li><\/ul>\n\n\n\n<p><strong>How is computation of Section 44(AD) done?<\/strong><\/p>\n\n\n\n<p>Say for eg:&nbsp; Gross\nreceipts of Rs. 70 lakhs comprising of Digital receipts of Rs. 60 lakhs &amp;\nCash receipts of Rs.10 lakhs.<\/p>\n\n\n\n<p>Proprietorship &#8211; Income 4, 40,000 \u2013 Tax = 0 <\/p>\n\n\n\n<p>Ineligible Businesses\u2019:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Claims deductions under Sec 10A\/Sec\n10AA\/Sec10B\/Sec10 BA for Pertinent FY<\/li><li>Ineligible also under section 80HH to Sec 80 RRB\nfor Pertinent FY<\/li><li>Agency business <\/li><li>Commission \/ Brokerage <\/li><li>Professionals.<\/li><li>Insurance Agents<\/li><\/ul>\n\n\n\n<p>Depreciations are not available.<\/p>\n\n\n\n<p><strong>Presumptive Sec under\n44 ADA. <\/strong><\/p>\n\n\n\n<p>This scheme is designed to give relief to small tax payers\ncarrying on professions that are covered under the presumptive taxation under\nSec 44 ADA, namely:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Legal<\/li><li>Medical<\/li><li>Engineering<\/li><li>Architecture<\/li><li>Accountancy<\/li><li>Technical<\/li><li>Consultancy<\/li><li>Interior Decorations<\/li><li>Other Professions notified by CBDT.<\/li><\/ul>\n\n\n\n<p>The buyers of Individual, Presumptive Partnerships are\neligible. &nbsp;The Gross receipts should not\nexceed 75 lakhs per annum.<\/p>\n\n\n\n<p>50% OF THE Gross receipts is considered for tax computation;\nhowever, income can be declared more than 50% also. &nbsp;Maintenance of books is not mandatory.<\/p>\n\n\n\n<p>Tax Audit is not applicable.<\/p>\n\n\n\n<p>Depreciation not available.<\/p>\n\n\n\n<p><strong>Computation of Tax:<\/strong><\/p>\n\n\n\n<p>Say for eg, a doctor has a gross receipts of 60 lakhs which\nare completely digital receipts. Taxable income will be 30 lakhs &amp; tax will\nbe after deducting 80C, 80D &amp; Other eligible receipts &amp; exemptions.<\/p>\n\n\n\n<p>Tax will be computed accordingly on the Individual Slab\nbasic.<\/p>\n\n\n\n<p><strong>Presumptive Taxation\nScheme under Sec 44 AE:<\/strong><\/p>\n\n\n\n<p>This is relief to small tax payers in the business of\nPlying, Hiring or Leasing of Goods Carriages, Individual, Proprietorship, HUF,\nFirm, Company all are eligible.<\/p>\n\n\n\n<p>The condition is that the business should not own more than\n10 vehicles at any time during the year.<\/p>\n\n\n\n<p>Business with more than 10 goods vehicle are not eligible\nfor this exemption.<\/p>\n\n\n\n<p><strong>Computation of\nPresumptive taxation under Sec44 AE.<\/strong><\/p>\n\n\n\n<p>Say for eg a Heavy Goods Vehicle with Income @ Rs1000\/- per\nton of gross vehicle weight for every month or a part of month during which the heavy goods vehicle\nis owned by the tax payers. Other than the heavy vehicle goods rate of\nRs.7500\/- per month shall be adopted or part of the month to be considered as full\nmonth for the part of computable taxation for eg. Heavy Vehicle carrying\n13 tons @ Rs.1000\/- per month, Number of vehicles \u2013 5, Monthly income will be\nRs.65000\/- x 12 months will be Rs.780000\/- as per Sec 44 AE.<\/p>\n\n\n\n<p>Let us assume income other than heavy vehicles, 4 vehicles\nmonthly income will be Rs.30000\/-, for 12 months Rs.3600000\/- as per Sec 44 AE.\nNo need to maintain books of Accounts. Advance Tax will be applicable. Person\nopting to pay less than the prescribed rate of Sec 44 AE can do so by\nmaintaining books of accounts and get the books audited.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Highlights of Section 44(AD), Presumptive Tax: Taxable limits for Section 44(AD) for FY 2023-24, 2024-25 is 3 Crores. A new condition has been introduced wherein a minimum of 5 years to be continued for Presumptive Tax benefits under Section 44(AD).&nbsp; If in the event, you switch over to regular business, the Presumptive benefits will be [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-373","post","type-post","status-publish","format-standard","hentry","category-accounts"],"_links":{"self":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts\/373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/comments?post=373"}],"version-history":[{"count":1,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts\/373\/revisions"}],"predecessor-version":[{"id":374,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts\/373\/revisions\/374"}],"wp:attachment":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/media?parent=373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/categories?post=373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/tags?post=373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}