INTERVIEW QUESTIONS INCOME TAX PRESUMPTIVE TAXATION FOR BUSINESSES DETAILS

Question: In case of a person adopting the provisions of section 44ADA, income will be computed on presumptive basis, i.e., @ _________of gross receipts of the specified profession for the year.

(a) 2% (b) 5%
(c) 50% (d) 10%

Answer: Correct answer : (c)
In case of a person adopting the provisions of section 44ADA, income will be computed on presumptive basis, i.e. @ 50% of the total gross receipts of the profession. However such person can declare income higher than 50%.

[As amended by Finance Act, 2016]
In other words, in case of a person adopting the provisions of section 44ADA, income will not be computed in normal manner but will be computed @50% of the gross receipts.
Thus, option (c) is the correct option.

Correct answer : (c)
In case of a person adopting the provisions of section 44ADA, income will be computed on presumptive basis, i.e. @ 50% of the total gross receipts of the profession. However such person can declare income higher than 50%.

[As amended by Finance Act, 2016]
In other words, in case of a person adopting the provisions of section 44ADA, income will not be computed in normal manner but will be computed @50% of the gross receipts.
Thus, option (c) is the correct option. Source: CoolInterview.com

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