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Section 44AE


Section 44AE

Presumptive Income in case of taxpayers engaged in business of plying, leasing or hiring of trucks

For those who are in the business of plying, leasing or hiring of trucks a scheme similar to presumptive income scheme under section 44D is available.

Section 44AE

Features of this scheme

  • Net Income from a heavy goods vehicle (including any goods carriage) will be assumed as Rs 7,500 per month for each vehicle beginning assessment year 2015-16.
  • You don’t have to maintain books of accounts of this business.
  • You don’t have to pay Advance Tax for such a business.
  • You are not allowed to deduct any business expenses against the income.

Here ‘Goods carriage’ means any vehicle used only for the carriage of goods. ‘Heavy goods vehicle’ means a goods carriage whose standalone weight (without loading goods) is more than 12,000 kgs.

Part of a month shall be rounded off to the next month. For example if a goods carriage is owned for 9 months and 3 days, the net income shall be calculated as if the carriage was owned for 10 months.

The relief of not maintaining accounting records & no requirement of audit is only applicable to the business to which this scheme applies. For any other businesses which are not covered under this section – the accounting records have to be made and audit is also required.

In case the taxpayer chooses to declare lower income than above, he shall have to maintain books of accounts and get them audited.

Section 44AE

Eligibility Criteria

To avail this scheme

  • You should be in the business of plying, leasing or hiring trucks.
  • You should not own more than 10 goods carriages at any time during the year. Include carriages taken on hire purchase or on installments.
  • You may be an individual, HUF, Company or partnership firm – scheme is allowed to all taxpayers.

Section 44AE

Deduction for Business Expenses

No business expenses are allowed to be deducted from the net income. Depreciation is also not deductible. However, in case of a partnership firm, separate deduction for remuneration of partners and interest paid to partners is allowed. This must be within the limit specified under section 40(b).

Even though depreciation is not allowed as a deduction written down value (WDV) of the assets shall be considered as if depreciation has been allowed.

Section 44AE

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Section 44AE

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