Whether deduction(s) on account of salary / interest to partners of firm shall be admissible from income estimated in accordance with sections 44AD and 44AE
Circular : No. 737, dated 23-2-1996.
1. Sections 44AD and 44AE were inserted in the Income-tax Act, 1961, by the Finance Act, 1994, w.e.f. 1st April, 1994. Section 44AD provides for a method of estimating income from the business of civil construction or supply of labour for civil construction work, where the gross receipts from the business do not exceed Rs. 40 lakhs. Section 44AE provides for a method of estimating income from the business of plying, hiring or leasing trucks owned by a taxpayer owning not more than 10 trucks. Both the schemes are optional.