• Regarding Presumptive Taxation for a company

I have a software development private limited company and currently its just me and my friend working on projects. We were thinking of going for presumptive taxation scheme this year as it maybe more beneficial for us but we need to clarify few points. 
1. In presumptive tax scheme will salary be considered as deduction from total income of the company?
2. As an example lets say we presumed that company will earn 10,00,000 in the given financial year. So we pay tax on 80000 which is 8% of 10L. What if at the end of the financial year the company earned 8L...then will the company get refund?
3. Continuing with the above example what if company earned 12L..then will company have to pay balance tax at the end of the year?
Shilpa Biswas
Asked 2 years ago in Income Tax from Mumbai, Maharashtra

Since your Company is a Private Limited Company, Presumptive Taxation @ 8% as per Section 44AD is not applicable.

You need to go as per regular provisions and maintain the books of accounts. Since it is a Private Limited company, anyway you have to get your accounts audited and then only you will be able to file your returns.

-CA Sridhar B S
B S Sridhar
CA, Chennai
43 Answers
17 Consultations

5.0 on 5.0

Dear Shilpa,

Only a resident individual/HUF/partnership firm is allowed to taken beneift of presumptive taxation. A Company is not allowed to take benefit of presumptive taxation.

Please feel free to revert in case of any doubts.

Thanks and Regards
Abhishek Dugar

Abhishek Dugar
CA, Mumbai
2929 Answers
123 Consultations

5.0 on 5.0

In private limited company as per our view presumptive taxation is not applicable. Please check
Shyam Sunder Modani
CA, Hyderabad
1408 Answers
95 Consultations

5.0 on 5.0

Presumptive tax scheme is not applicable to private limited company.
Private limited companies have to have statutory auditor, to do the statutory audit of the company.
Pvt ltd companies are also liable to maintain all the books of accounts and maintain statutory compliance.
Pvt Ltd company also required to conduct  AGM before 30th september for approval of the audited Financial Statement by the members of the company.

Vishakha Agarwal
CA, Bangalore
431 Answers
56 Consultations

5.0 on 5.0

Hello Shilpa,

In your case since you have a Private Limited Company, you are not elligible for Presumptive Taxation Scheme. In such a case you will have to maintain proper books of accounts and get your Company Audited.

Trust this clarifies your query. 

Feel free to call back/ get back in case of further clarifications. 

Thanking You. 

Rohit R Sharma
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

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