Case Study Of Mr Bhalla

901 Words2 Pages

Bhalla started with a grocery shop. Any income arises from any business or any profession is chargeable to tax under the head of “Profit and Gains from Business and Profession”.
Now, here, Mr. Bhalla is a businessman, engaged in grocery business so his income is chargeable to tax under the same head.
But there are some conditions to it.
1. It is possible that he is exempted from tax means his business income doesn’t exceed the specified limit. In that case, no tax liabilities have to furnish.
2. It is possible that he doesn’t keep records and pay taxes on estimated basis or may not pay and also his business income exceeds to the exempted limit. In that case:
a) According to section 44AA of the income tax act, Mr. Bhalla, being an individual, has to maintain and furnish all books of accounts, records, documents, evidences, traces, if his business income exceeds ₹150,000 or gross receipts or total sales or turnover (whichever term is being in force) is equal to or more than ₹25,00,000 in any three immediately or consecutive preceding the previous year. So …show more content…

Bhalla opts for section 44AD, then, he has to consider certain points:-
i.) He shall not be allowed to claim any expenses or depreciation or any other expenses covered under section 30 to 38. ii.) He shall not be allowed to deduct any remuneration, salary, or interest paid to his partner (if any) under section 40(b). iii.) Now, the above two sections i.e. section 44AA (Maintenance of books of accounts) and section 44AB (Furnishing of Tax Audit) is not required. iv.) He is liable to pay Advance Tax and follow the prescribed rules which will apply. However, he may opt to pay Advance Tax by 15thMarch of Financial Year.
v.) If he finds any disallowance of any expenses, in that case, it will be assumed that it has been already under taken and made in calculation of estimated profit.

Now, while calculating the taxable income from the grocery some principals are to be considered by assesse (here, Mr.

More about Case Study Of Mr Bhalla

Open Document