44AD income and setoff of business loss - Professionals - Taxation - TIK Share
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44AD income and setoff of business loss


Rahul Rai

2015-01-03

I have a client and i am filing his income tax return. My doubts are:

  1. His turnover is less than 1 crore, so no tax audit for him. He has carried forward business loss of previous years. Is it possible to setoff the business loss in case of filing return under section 44AD.
  2. If i dont opt for 44AD but file return under normal provisions, should i compulsory provide the balance sheet and p/l data?
  3. Should i coumpulsory show profit higher than 8%, even if i dont opt for 44AD and maintain all books of accounts?

CA Pulkit Sharma

2015-01-04

Sectiuon 44AD provides that all expenses are claimed including setoff. So you cannot file form ITR4S to claim setoff of broght forward losses.

You have to use form ITR4.

By filing ITR4 and showing profit more than 8%, you can claim setoff your losses. Tax audit is not applicable in case your turnover is less than 1 crore and profit is 8% or more.

You have to show the balance sheet and p/l details.

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