Section 44AD - Eligible Business - Speculative Business, Income Tax

[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.

Posts / Replies

[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