Section 44AD - Eligible Business - Speculative Business

[PANKAJ GROVER]

Dear Sir

Whether Eligible Business under Section 44AD covers Speculative Businesses like jobbing in shares, commodities and how is the turnover will be calculated in case of Jobbing of commodities?

For .e.g. An Assessee doing business of Jobbing of Commodities has one transaction of jobbing profit of Rs 4 Lac and another transaction  of Jobbing loss of Rs 3 Lac hence net profit of Rs 1 Lac. Can he declare income under Section 44AD by calculating 8% of Rs 7 Lacs i.e Rs 56K.

Regards

RAPG & Co.

[sanjeev bajaj]

Speculative Business is a business covered u/s 44AD of the Act.

Turnover will be the total of profits & losses. In this case, Turnover is Rs. 7 Lacs.

Section 44 AD talks about 8% of the turnove or sum higher than 8 % of the turnover. In this case, there is clear profit of more than 8% of the turnover. Hence, you have to show more than 8%.

Regards

SANJEEV BAJAJ

 

AI Summary

Presumptive taxation treats speculative jobbing turnover as gross receipts; declare higher if net profit exceeds the presumptive percentage. Speculative business for presumptive taxation is treated as eligible; turnover for jobbing is the aggregate of profits and losses from jobbing transactions, and if actual net profit exceeds the presumptive percentage of that turnover the assessee must declare income higher than the presumptive amount.