Tax
Section 44AD
Also known as: Presumptive Scheme, 44AD
Income tax provision allowing presumptive taxation for eligible businesses with turnover up to ₹2 crore.
Detailed Explanation
Section 44AD of the Income Tax Act provides for presumptive taxation where eligible taxpayers can declare 6% or more of their turnover as profit. This section is commonly used by small F&O traders to avoid maintaining detailed books of accounts and audit requirements.
Related Terms
Presumptive Taxation
A simplified tax scheme where profits are presumed as a percentage of turnover, avoiding detailed bookkeeping.
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Turnover
For F&O taxation, the sum of absolute profits and losses from all trades during the financial year.
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Books of Accounts
Systematic records of business transactions required for tax compliance and audit purposes.
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