1. By Group 7
-Miconi Shah ( 104125 )
-Nirav Patel ( 104132 )
- Rikin Jain ( 104145 )
- Seemul Patel ( 104150 )

2.  Specified Professions – For the purpose of
sec.44A legal, medical, engineering,
architectural, accountancy, technical
consultancy, or interior decoration or any
other notified profession are specified
profession
 Non Specified Professions – A non-specified
profession is a profession other than a
“Specified profession”

3.  Persons carrying on “specified profession” – If
annual gross receipts do not exceed Rs 1,50,000
the taxpayer is required to maintain such books
of account as may enable the Accessing Officer
to compute his taxable income under the
Income-tax Act.
 Persons carrying on “non-specified professions”
or any business – If annual income does not
exceed Rs 1,20,000 and annual gross
receipts/turnover does not exceed Rs 10,00,000
the tax payer is not required to maintain any
books of account

4.  Persons covered by sections 44AD, 44AE,
44BB, 44BBB – If it is claimed that business
income is lower than the income computed
under these sections on estimated basis, the
tax payer will have to maintain such books of
account as may enable the Accessing Officer
to compute his taxable income

5.  The following persons are required to get
their accounts compulsorily audited by C.A.
Different Tax Payers When they are covered by the
provisions of compulsory audit
under sec.44AB
A person carrying on business If total sales, turnover or gross
receipt in business for the
previous year(s) relevant to the
assessment year exceed or
exceeds Rs 60 lakh
A person carrying on If his gross receipts in
profession profession for the previous
year(s) relevant to the
assessment year exceeds Rs 15
lakh

6. Different Tax Payers When they are covered by the
provisions of compulsory audit
under sec.44AB
A person covered under section If such persons claims that the
44AE 44BB or 44BBB profits and gains from the
business are lower than the profits
and gains computed under these
sections
A person covered under section If such person claims that the
44AD profits and gains from the
business are lower than the profits
and gains computed in accordance
with the provisions of section
44AD( 1 ) and if his income
exceeds the maximum amount
which is not chargeable to tax

7.  Due date for getting books
audited/submission of audit report and Form
No.
Different Audit Form Statement Due date Due date
taxpayers No. particulars for getting for
books submission
audited of audit
report
In case of Form No. Form No. September September
person who 3CA 3CD 30 of the 30 of the
carries on assessment assessment
business or year year
profession
and who is
required by
or under
any law to
get his
accounts
audited

8. Different Audit Form Statement Due date for Due date for
taxpayers No. particulars getting submission
books of audit
audited report
In case of Form no. Form No. September September
person who 3CB 3CD 30 of the 30 of the
carries on assessment assessment
business or year year
profession
but not
being a
person
referred to
above

9.  Where an asset [ not an asset referred to in sec.
45(2)], which has become the property of an
amalgamated company under a scheme of
amalgamation, is sold after February 29, 1988 as
stock-in-trade, then, in computing the profits and
gains from the sale of such asset, the cost of
acquisition of the asset to the amalgamated company
shall be the cost of acquisition of the asset to the
amalgamating company, as increased by the cost, if
any, of any improvement made thereto and the
expenditure incurred wholly and exclusively in
connection with such transfer

10.  When an asset which has been acquired by the
assessee on transfer, either by way of total or
partial partition of a Hindu undivided family or
under a gift or will or an irrevocable trust, is sold
after Feb 29, 1988, as stock-in-trade, then, in
computing the profits and gains from the sale of
such asset, the cost of acquisition shall be the
cost of any improvement made and the
expenditure incurred wholly and exclusively in
connection with such transfer including the
payment of gift-tax, by the transferor or the
donor

11.  Sec.44AD – In case of taxpayers engaged in a
business
 Sec.44AD is applicable only if following
conditions are satisfied
◦ Eligible Assessee-
 Eligible assessee for this purpose is a resident
individual, a resident HUF or a resident partnership
firm(not being a limited liability firm)
◦ Has not claimed some deductions-
 The assessee has not claimed any deduction under
sections 10A,10AA,10B,10BA,80HH to 80RB in the
relevant assessment year

12. ◦ Eligible business –
 The assessee should be engaged in any business
except the business of plying, hiring or leasing
goods carriage referred to in section44AE
◦ Turnover –
 Total turnover/gross receipts in the previous year
of the eligible business should not exceed Rs.60
lakh.

13.  If the above conditions are satisfied, the income from
the eligible business is estimated at 8% of the gross
receipt or total turnover
 The following points should be noted –
 The assessee can voluntarily declare a higher income
in his return
 All deductions under section 30 to 38, including
depreciation & unabsorbed depreciation are deemed
to have been already allowed and no further
deduction is allowed under these sections.

14.  An assessee opting for the above scheme
shall be exempted from payment of advance
tax related to such business
 An assessee opting for the above scheme
shall be exempted from maintenance of
books of account related to such business as
required under section 44Aa

15. ◦ Is it possible to declare lower income – A taxpayer can
declare his income to be lower than the deemed profits
and gains
◦ The following consequences are applicable if the
taxpayer declares his income to be lower
 The taxpayer will have to maintain the books of accounts as
per section44AA if his total income exceeds the exemption
limit.
 The taxpayer will have to get his books of accounts audited
under section 44AB if his total income exceeds the
exemption limit.

16.  In the case of taxpayers engaged in the
business of plying, leasing or hiring trucks.
 Sec.44AE is applicable only if following
conditions are satisfied
 Condition 1
◦ The taxpayer may be an individual, HUF, AOP, BOI,
firm, company, co-operative society, or any other
person. He or it may be a resident or a non-resident
 Condition 2
◦ Taxpayer is engaged in the business of plying, hiring
or leasing goods carriage.

17.  Condition 3 –
◦ Taxpayer owns not more than 10goods carriages
during PY. For this purpose, a taxpayer, who is in
possession of goods carriage, whether taken on hire
purchase or on installments and for which the whole
part of the amount is payable is still due, shall be
deemed to be the lower of such goods carriage.
 Consequences if section44AE is applicable-
 Income to be calculated on estimated basis:
◦ Heavy goods carriage –
 Rs.5000 for every month during which the goods
carriage is owned by the taxpayer

18. ◦ Goods Carriage –
 Rs4500 for every month during which the goods carriage
is owned by the taxpayer
 Estimated income is comprehensive :
◦ All deductions under section 30 to 38 including
depreciation and unabsorbed depreciation, are
deemed to have been already allowed and no further
deduction is allowed under this section
 Provision for maintenance of books of accounts
:
◦ Similar to section 44AD
 Is it possible to declare Lower Income :
◦ Similar to section 44AD

19.  Other points to be noted –
◦ Section 44AE does not permit an assessee to apply
provisions of section 44AE in case of some lorries
and to go for regular assessment on basis of books
of account in respect of remaining lorries
◦ The Assessing Officer cannot apply provisions of
section44AE for estimating income from truck
plying, and making addition separately on account
of sale proceeds of scrap because receipt from
scrap is not a separate source of income.

20.  Valuation of stock is vital factor in
determining taxable income of an assessee
from business, as correct profits cannot be
ascertained unless the opening and closing
stocks are valued correctly
 Neither the Income-tax Act nor the Income-
tax Rules prescribes or permits any particular
method of valuation of stock
 A assessee may value its stock either at cost
price or at market price, whichever is less

21.  The new method of stock valuation cannot be
rejected merely because there would be loss of
revenue in the year of change. What is relevant is
to consider whether the method adopted is one
of the recognized methods and further whether
the changed method of stock valuation is
followed consistently year after year
 If valuation of closing stock is made on the basis
of the lower of cost or market price, it can be
done on the basis of individual method or global
method

22.  The issue relating to whether the value of
closing stock of the inputs, work-in-progress
and finished goods must necessarily include
the element for which MODVAT credit is
available has been the matter of considerable
litigation

23.  By virtue of sec.145A, the valuation of purchase
and sale of goods and inventory for the purpose
of determining the income chargeable under the
head “Profits and gains of business or
profession” shall be
- In accordance with the method of accounting
regularly employed by the assessee
- further adjusted to include the amount of any
tax, duty, cess, or fee actually paid or incurred by
the assessee to bring the goods to the place of
its location and condition as on the date of
valuation