Business Line: Read Section 44AD when filing return
Some of you who trade in the markets would have probably received notices for defective returns from the Income Tax department for the assessment year 2012-13.
One possible reason could be that you did not take note of the the amendment to section 44AD which deals with computing profits and gains from a business on a presumptive basis.
Previously, only construction business was covered under section 44AD. But from AY 2011-12, all businesses including the business of trading in the markets was brought under its purview. What this section says is that if your turnover is less than Rs 1 crore and if your profit is less than 8 per cent, then you will have to get your books audited by a chartered accountant. Turnover in this context would means settlement turnover and not contract turnover.
Visit this link to read the complete article.