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Profits & Gains of Business and

Profession
• Business includes Any
Trade,Commerce,Manufacture or any
Adventure or Concern in the Nature of
Trade,Commerce or Manufacture.
• Example :- A Lady is running a shop
• Proffession requires purely intellectual or
manual skill on the basis of some special
learning and qualification gathered through
past training or experience.
• Example :- Doctor,Lawyer, CA,CMA,CS.
DEPRECIATION(SEC.32)
• DEPRECIATION IS AVAILABLE ON “BLOCK OF ASSETS”

• ASSETS MUST BE OWNED BY THE ASSESSE.


• IT MUST BE USED FOR THE PURPOSE OF THE
BUSINESS OR PROFESSION
• IT SHOULD BE USED DURING THE PREVIOUS
YEAR
• IT IS MANDATORY FOR AN ASSEESSE TO CLAIM
DEPRECIATION.
• BLOCK OF ASSETS :- A GROUP OF ASSETS FALLING
WITHIN A CLASS OF ASSETS WHICH COMPRISES OF :-
• TANGIBLE ASSETS – ASSETS WHICH HAVE MOVABLE IN
NATURE & HAVE PHYSICAL EXISTENCE.
• EXAMPLE:- BUILDINGS,MACHINERY,PLANT
• INTANGIBLE ASSETS :- ASSETS WHICH ARE IMMOVABLE
IN NATURE & NOT HAVE ANY PHYSICAL EXISTENCE.
• EXAMPLE :- KNOW- HOW, COPYRIGHT,
TRADEMARKS,LICENCES,PATENTS.
• DEPRECIATION

First year of acquisition Subsequent year

Put to use 180 days or more less than 180 days full rate of depreciaton

full rate of depreciation half the normal rates


Computation of written down value of a
block of assets
particulars Amount(RS) Amount (RS)
OPENING WRITEEN DOWN VALUE
ADD :- PURCHASE DURING THE YEAR
LESS :- SALE VALUE OF ASSETS SALE DURING THE Yr.
CLOSING WRITTEN DOWN VALUE BEFORE DEP.
LESS :- DEPRECIATION
CLOSING WRITTEN DOWN VALUE
COMPUTATION OF ALLOWABLE
DEPRECIATION
PARTICULARS BLOCK-1 BLOCK-2 BLOCK-3 BLOCK-4 BLOCK-5

WDV AS ON 1000000 1600000 NIL 200000 120000


(01/04/2019)
Add: Purchase
:- 31/07/2017 NIL 200000 NIL NIL NIL
:- 31/01/2018 NIL 200000 120000 NIL NIL
Less:Sales NIL 1200000 NIL NIL NIL
Closing WDV before
Depreciation 1000000 800000 120000 200000 120000
LESS: Depreciation 100000 105000 24000 20000 18000
Closing WDV 900000 695000 96000 180000 102000
• Additional Depreciation@20% (@10% if used
less than 180 days )on purchase of New Plant
& Machinery by Assessee engaged in the
business of manufacturing or production of
any article or thing or generation ,
transmission or distribution of power.
Maintenance of books of accounts
(SEC.44AA)
Current previous year : - 2019-2020
Current assessment year : - 2020-2021
Last three Preceding Previous Year : -
(1).2018-19, (2).2017-2018, (3).2016-17
 If Gross Receipts exceed RS.1.5 Lakhs For specified profession. Or ,
 Income from Business or Profession exceed RS. 1.2 lakhs (for
individuals /HUF RS.2.5lakhs). Or ,
 Total Sales / Turnover / Gross receipts Exceed RS. 10LAKHS (RS.25
lakhs in the case of individuals/HUF) .
 NOTES : - Required to maintain books of accounts(cash book
,journal ,ledger ,carbon copies of bills or receipts exceed RS .25,
Original bills & receipts.)
PGBP

Normal Scheme presumptive taxation scheme


Welcome All Optional With Conditions

For all
For Businessman For Professional

SEC..44AD SEC.44AE SEC.44ADA


Sec.44AD
(For business other than transport business)

Income Income
= @8 % of gross receipts = @6% of gross receipts
(when accounts not maintain electronically.) ( When accounts maintain electronically)
NOTES :-
(1).Under presumptive taxation scheme no any expenses allowed as deduction from income
calculated under presumptive taxation scheme.
(2).No audit & books of accounts maintain is required for whom . who opted for presumptive
taxation scheme.
(3).presumptive taxation scheme is only for those business or profession ,whose turnover is
less then 2 Crores.
Sec.44 AE
For motor Plying, Hiring or Leasing Business

Heavy motor vehicles Light motor vehicles

Income Income
=(RS.1000 per ton*per vehicles*per month) =RS.7500 per month*per vehicles

NOTES :- (1). ONLY FOR WHOM ,WHO HAVE 10 OR LESS THAN 10 MOTOR VEHICLES.
Sec.44ADA
For profession

Income = 50% of Gross Receipts


NOTES :-
(1) No need to Maintain Books of Accounts.
(2)No need to required Audit of Books of Accounts.
(3) It is only for professional whom, who have less than
2 crores Gross receipts in Previous year.

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