Section 44AF of Income Tax Act "Special provisions for computing profits and gains of retail business"
44AF. (1) Notwithstanding anything to the contrary
contained in sections 28 to 43C, in the case of an assessee
engaged in retail trade in any goods or merchandise, a sum
equal to five per cent of the total turnover in the previous
year on account of such business or, as the case may be, a
sum higher than the aforesaid sum as declared by the
assessee in his return of income shall be deemed to be the
profits and gains of such business chargeable to tax under
the head "Profits and gains of business or profession" :
Provided that nothing contained in this sub-section shall
apply in respect of an assessee whose total turnover exceeds
an amount of forty lakh rupees in the previous year.
(2) Any deduction allowable under the provisions of sections
30 to 38 shall, for the purposes of sub-section (1), be
deemed to have been already given full effect to and no
further deduction under those sections shall be allowed :
Provided that where the assessee is a firm, the salary and
interest paid to its partners shall be deducted from the
income computed under sub-section (1) subject to the
conditions and limits specified in clause (b) of section 40.
(3) The written down value of any asset used for the
purpose of the business referred to in sub-section (1) shall
be deemed to have been calculated as if the assessee had
claimed and had been actually allowed the deduction in
respect of the depreciation for each of the relevant
assessment years.
(4) The provisions of sections 44AA and 44AB shall not apply
in so far as they relate to the business referred to in
sub-section (1) and in computing the monetary limits under
those sections, the total turnover or, as the case may be,
the income from the said business shall be excluded.
(5) Notwithstanding anything contained in the foregoing
provisions of this section, an assessee may claim lower
profits and gains than the profits and gains specified in
sub-section (1), if he keeps and maintains such books of
account and other documents as required under sub-section
(2) of section 44AA and gets his accounts audited and
furnishes a report of such audit as required under section
44AB.
(6) Nothing contained in this section shall apply to any
assessment year beginning on or after the 1st day of April,
2011.
What are Amounts not deductible? Section 40 of Income Tax Act 1961
What are Profits chargeable to tax? Section 41 of Income Tax Act 1961
Section 43AA Taxation of foreign exchange fluctuation
Section 43CB Computation of income from construction and service contracts
Section 44ADA Special provision for computing profits and gains of profession on presumptive basis