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MCQ Self Challenge #0087 on Tax on Presumptive Basis under Income Tax Act

 

Tax on Presumptive Basis under Income Tax Act

 

Dear Professional Seniors & Friends,
Warm Greeting!

Here is the Next post of #MCQ on concept based practical professional knowledge on tax on presumptive basis under Income Tax Act in a unique manner to be self answered by participants. The detailed answer of these MCQs shall be posted next day for the self assessment of the participants.

MCQ 87.1: The presumptive taxation scheme of section 44AD cannot be adopted by __________.
A. Resident Individual
B. Resident HUF
C. Resident Partnership Firm
D. Limited Liability Partnership Firm

MCQ 87.2: In case of a person adopting the provisions of section 44AD, income will be computed on presumptive basis, i.e., @ 6% of the turnover or gross receipts of the eligible business for the year if turnover/gross receipt is received by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account during
A. The previous year
B. Before the due date of filing of return under section 139(1)
C. Any time During the Assessment year
D. Both A & B.

Sincere Regards

CA Sanjay Kumar Agrawal
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Answer MCQ Self Challenge #0087

 

Dear Professional Seniors & Friends,

Warm Greetings!

 

This post of MCQ is on provisions relating to Tax On Presumptive Basis under Income Tax Act.

 

Answer MCQ 87.1: D) Limited Liability Partnership Firm

Answer MCQ 87.2: D)Both A & B

 

Practical Analysis for MCQ 87.1 & 87.2

  • The presumptive taxation scheme of section 44AD is designed to give relief to small taxpayers engaged in any business (except the business of plying, hiring or leasing of goods carriages referred to in section 44AE). The presumptive taxation scheme of section 44AD can be adopted by following persons :

1) Resident Individual

2) Resident Hindu Undivided Family

3) Resident Partnership Firm (not Limited Liability Partnership Firm)

  • In other words, the scheme cannot be adopted by a non-resident and by any person other than an individual, a HUF or a partnership firm (not Limited Liability Partnership Firm). This scheme cannot be adopted by a person who has made any claim towards deductions under section 10A/10AA/10B/10BA or under sections 80HH to 80RRB in the relevant year.
  • In order to promote digital transactions and to encourage small unorganized business to accept digital payments, section 44AD is amended with effect from the assessment year 2017-18 to provide that income shall be computed at the rate of 6% instead of 8% if turnover/gross receipt is received by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account during the previous year or before the due date of filing of return under section 139(1).

 

On the Basis of Above Analysis Correct Answer to MCQ 87.1 – D) Limited Liability Partnership Firm and Correct Answer to MCQ 87.2 – D) Both A & B

 

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as professional opinion; you can definitely have your own opinion.)

 

Sincere Regards!

 

CA Sanjay Kumar Agrawal

Mobile: 9810116321

 

To access MCQ posts regularly, please Join Telegram Channel:
https://t.me/caSanjayKumarAgrawal

 

For All MCQ post please click on:

Webpage: http://www.casanjay.me/

Facebook: https://www.facebook.com/CA.Sanjay.K.Agrawal/

Linkedin: https://www.linkedin.com/in/ca-sanjay-kumar-agrawal/

 

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