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Profits and gains of business of plying, hiring or leasing goods carriages – Section 44AE

Eligible Assessee – This section is applicable to assessee who is engaged in the business of plying, hiring or leasing of goods carriages and who doesn’t own more than 10 goods carriages at any time during the year.

Even if the no.  of goods carriages exceeds 10 at any time during the year, then this section does not apply.

Deemed profits – The profits of such business shall be computed as follows –

Profit and gains Rs.
  1. In case of goods carriage being a heavy goods vehicle:

Rs. 5,000 per month per vehicle × No. of month(s) or part of a month in the year during which the vehicle is owned by the assessee × No.  of heavy goods vehicle

××
  1. In case of goods carriage other than a heavy good vehicle :

Rs. 4,500 per month per vehicle × No. of month(s) or part of month in the year during which the vehicle is owned by the assessee × No. of other goods carriages

××
Profits & Gains of business or Profession from this business (I+II) ××

 

Heavy good vehicle means any goods carriage the gross vehicle weight(unladen weight ) of which exceeds 12,000 kgs.

Hire purchaser deemed to be owner of the goods carriage.

Deductions from deemed profit :-

No deduction of Section 30 to 38 (including unabsorbed depreciation) is allowed from such deemed profit.

Where the eligible assessee is a partnership firm, salary and interest to partners  subject to section 40(b) shall be deducted from such deemed profit.

WDV of depreciable assets:-

The written down value of any asset of an eligible business shall be deemed to have been calculated as if the eligible assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant years.

Section 44AA and 44AB shall not apply to such business and in computing monetary limits under those sections, gross receipts or income from such business shall be excluded.

However an assessee can claim profits to be lower than mentioned by maintaining books of account as mentioned in section 44AA and gets them audited as per section 44AB.

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