Section 44AD on presumptive income:
Section 44AD. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession” :
(4) Where an eligible assessee declares profit for any previous year in accordance with the provisions of this section and he declares profit for any of the five assessment years relevant to the previous year succeeding such previous year not in accordance with the provisions of sub-section (1), he shall not be eligible to claim the benefit of the provisions of this section for five assessment years subsequent to the assessment year relevant to the previous year in which the profit has not been declared in accordance with the provisions of sub-section (1).
(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee to whom the provisions of sub-section (4) are applicable and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.
Thus, as per the above provision in case for person having eligible business and having turnover upto two crore rupees declaring profit @ 8% shall be liable to keep books of accounts.
Disclosures in ITR 4:
As regards financial particulars of the business, ITR 4 for A.Y.2017-18 sought only information relating to amount of a) total sundry debtors, (b) total sundry creditors, (c) total stock-in-trade and (d) cash balance.
The new ITR 4 for A.Y.2018-19, in addition to sundry creditors, seeks details of partners/ members own capital, secured and unsecured loans, advances and other liabilities. The total capital and liabilities would be the sum of the figures of the above assets.
Likewise, in addition to the three items of assets which are required to be disclosed in ITR 4 for A.Y.2017-18, ITR 4 for A.Y.2018-19 seeks details of balance with banks, loans and advances and other assets. The total assets would be the sum of the figures of the above assets.
FINANCIAL PARTICULARS OF THE BUSINESS AS REQUIRED TO BE SHOWN IN ITR 4:
|E11||Partners/ Members own capital||E11|
|E17||Total capital and liabilities (E11+E12+E13+E14+E15+E16)||E17|
|E21||Balance with banks||E21|
|E23||Loans and advances||E23|
|E25||Total assets (E18+E19+E20+E21+E22+E23+E24)||E25|
|NOTE||► Please refer to instructions for filling out this schedule|
|(E15, E19, E20, E22 are mandatory and others if available)|
Explanation F to section 139(9):
However Explanation (f) to section 139(9) mandates reporting of only turnover/ gross receipts, gross profit, expenses, net profit, total debtors, creditors, stock in trade and cash balance as at the end of financial year, for the return to treated as valid return of income. The same is reproduced as below:
For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely :—
(f) where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock-in-trade and cash balance as at the end of the previous year.
Thus, a return shall not be regarded as defective in case complete balance sheet is not given in the return but amounts of turnover / gross receipts, gross profits, expense and net profit, sundry debtors, sundry creditors and cash balance is provided for as explained above.
Thus , in case assessee is filing ITR 4 it is not necessary to disclosed particulars of balance sheet.