SECTION 44AF SPECIAL PROVISIONS FOR COMPUTING PROFITS AND GAINS OF RETAIL BUSINESS
Updated: Oct 14, 2022
Sub Section 01- In the case of an assessee engaged in retail trade of any goods or merchandise, regardless of anything to the contrary contained in sections 28 to 43C, a sum equal to 5% of the total turnover on account of such business in the previous year, or, as the case may be, a sum higher than the aforesaid sum as declared by the assessee in his return of income, shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains." With the caveat that nothing in this subsection will apply to an assessee whose total revenue for the previous year exceeded Rs. 40 lakh.
Sub Section 02- For the purposes of subparagraph (1), any deduction permitted by the provisions of sections 30 to 38 shall be regarded to have been given full effect, and no further deduction shall be permitted by those provisions: As long as the conditions and restrictions outlined in section 40's clause (b) are met, the pay and interest paid to the assessee firm's partners may be deducted from the income computed under subsection (1).
Sub Section 03- Any asset utilized for the purposes of the business mentioned in subsection (1) shall be considered to have had its written down value determined as if the assessee had requested and been granted the deduction for depreciation for each of the pertinent assessment years.
Sub Section 04- The provisions of sections 44AA and 44AB shall not apply with respect to the business referred to in subsection (1), and the entire turnover or, if applicable, the income from such business shall be disregarded in calculating the monetary limits under those sections.
Sub Section 05- If an assessee keeps and maintains the books of accounts and other documents required by subsection (2) of section 44AA, has his accounts audited and provides a report of the audit as required by section 44AB, he may, notwithstanding anything in the preceding provisions of this section, claim lower profits and gains than the profits and gains specified in subsection (1).
Sub Section 06- Nothing in this provision shall be applicable to any assessment year commencing on or after April 1, 2011.