Changes in 44AD Feeding As per Budget 2023

ZenIT || Changes in 44AD Feeding As per Budget 2023

Whats New : The presumptive taxation scheme of section 44AD can be availed only if your total turnover or gross receipts from the business do not exceed Rs. 2 crores for AY 2023-2024 onwards. However, these limits were revised from 2 crores to 3 crores in Budget 2023 if the cash receipts of such businesses are less than 5% of the total receipts. The new rates are applicable from AY 2024-25.
Who can opt for the presumptive taxation scheme of section 44AD:
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.
Businesses not covered under the presumptive taxation scheme of section 44AD:
The scheme of section 44AD is designed to give relief to small taxpayers engaged in any business, except the following businesses:
1) Business of plying, hiring or leasing of goods carriages referred to in section 44AE.
2) A person who is carrying on any agency business.
3) A person who is earning income in the nature of commission or brokerage.
Apart from above discussed businesses, a person carrying on profession as referred to in section 44AA(1)is not eligible for presumptive taxation scheme.
Process to Data feeding in Software:
Step 1:
Go To Transaction >>Business and profession Income:
​


Step 2 and 3:
Select the Presumptive >> 44AD >> then Click on Add:



Step 4:
Now, put the data entry in the respective columns:



Note:
For Banking Channel contains --> Through a/c payee cheque or a/c payee bank draft or bank electronic clearing system received or prescribed electronic modes received before specified date.
For Cash Receipts contains --> Receipt in cash.
Turnover Other mode --> other than Banking Channel and Cash receipts.

C= To avail the benefit of a 3 Cr. turnover, as per the budget changes, cash Turnover should not exceed 5% of the total turnover.
For Example:
      A= Turnover (Other Mode):- 1,50,00,000
      B= Turnover (Banking Channel):- 1,00,00,000
      Total Turnover (Other + Banking channel) = 2,50,00,000
      So, the Cash Turnover (should not be more than 5%): 2,50,00,000 * 5% = 12,50,000.
Note: The total gross turnover should not be more than 3 Cr.

Hope This Helps.

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