I trade in FnO and that is my sole source of income. My turnover is 23 lk and profit is 19 lk. I want to use presumptive tax scheme under sction 44 AD.
How my tax liability will be calculated and on what amount 6% of 23 lk or 6% of 19 lk or something else? I am confused?
It will be great if any one can provide details.
Thanks in anticipation.
Hello @Sudip
The 6% turnover specified under Section 44AD should be calculated on the absolute turnover in the case of F&O transactions. Therefore, if the absolute turnover amounts to Rs. 23 lakhs, the 6% presumptive income should be computed on Rs. 23 lakhs.
Hope this helps !!
Hello Priyanshu,
Thank you for your reply. Let me put it figuratively to clear my understanding on the subject.
With turnover of 23 lakh and net profit 19 lakh, the tax liability comes to 6% (all being digital transactions) of turnover under Section 44AD. In such case, tax liability comes to 1,38,000. Is it aplicable even if I declare actual profit of 19 lakh? If I put this profit undder regular tax computation, tax liability comes to something around 10-12 lakh. Here I am getting confused and request clarification. Is it necessary to declare the actual profit?
I understand that surcharge and cess, as applicable, will be added to it. However if the tax is to be paid in April of A.Y. it will attract a fine. Whether both 234B and 234C shall be applicable in this case, or only 234B will apply? I assume Section 44AD doesn’t require quarterly advance tax, 234C may not be applicable in case of filing under Section 44AD. Please clarify.
I am looking forward to hear you. Thanks once again.
Hello @Sudip
As per section 44AD, you need to declare 6% of turnover or actual profit whichever is higher, in your case your actual profit is higher than 6% of turnover, so 19 lakhs would be considered as your income and advance tax needs to be paid on Rs. 19 lakhs income by 15th March, otherwise interest under 234C for 1 month would be levied.
Hope this helps !!
Hello Priyanshu,
Thanks for clarification. However still I have a doubt.
!9 lakh is to be considered as profit as this is higher than 6% of turnover. This much is clear. But how the tax is to be calculated? As per the tax slabs considering 19 lakh as the taxable income or a straight 6% on it? This aspect is still not clear to me.
Does Quicko has any service to calculate the tax and file the return on my behalf?
Thanks in anticipation.
Hello @Sudip
The tax is to be calculated based on slab rates considering Rs. 19 Lakhs as income.
Hey @Sudip,
Yes, Quicko does offer a service where an expert can calculate your tax and file your return on your behalf.
You can book a MEET here as per your requirements:
Thank you!