Business Turnover : What to Deduct & What Not ?

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turnoverThe computation of turnover is important for any business, because two major provisions under Income Tax Act apply on the basis of turnover of the business. For example, if a business is having turnover of more than one crore ( 10 million) not only it will have to get its accounts audited u/s 44AB, but also, it can not take the benefit of presumptive taxation scheme  under section 44AD.While the benefit of presumptive taxation is great, wrong computation of turnover by which you computed the turnover less and wrongly thought to be below Rs 1 Crore, may  make you liable to a penalty u/s 271B .

Therefore,  the computation of turnover should be done by proper examination of business and entries in books of accounts. Readers should also read meaning of turnover for derivative trades & day trading of share.

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