FAQs on Presumptive Taxation & Capital Gains
- Blog|Income Tax|
- 3 Min Read
- By Taxmann
- Last Updated on 7 January, 2021
Q1. What is the rate of deemed profits in case of presumptive taxation under Section 44AD?
Q2. What is the rate of presumptive income under Section 44AD on digital receipts?
Q3. I have received the sale proceeds of credit sales in the month of July 2018. Whether I can declare presumptive income for credit sales at 6% as such credit sales were made in the previous year 2017-18?
You can declare presumptive income at 6% for such credit sales while filing your income tax return. The benefit of reduced rate of 6% will be available even if the proceeds of credit sales are received after the previous year but before due date of filing return under Section 139(1).
Q4. I have made cash sales as well as digital sales for the previous year 2017-18. How can I determine the rate of presumptive profit under Section 44AD?
As per the provisions of Section 44AD the rate of deemed profit would be 8% for cash sales and would be 6% in case of digital receipts.
Q5. Whether a firm can file ITR-4 Sugam for presumptive income?
Yes, firms can file ITR 4 for presumptive income.
Q6. I want to opt for presumptive tax scheme under Section 44AD. I have income from more than one house property. Can I file return in ITR-4?
No, you cannot file ITR-4S. Any person earning income from more than one house property cannot file return in ITR 4. You can report your presumptive income in ITR 3.
Q7. I want to opt for presumptive tax scheme under Section 44AD. I have income from capital gains as well. Can I file return in ITR-4?
No, you cannot file ITR-4. Any person earning capital gains cannot file return in ITR 4. You can report your presumptive income in ITR 3.
Q8. I have earned profit from sale of listed shares which were kept for more than 12 months. Whether it will be treated as capital gain or business profit?
Q9. I have earned a profit of Rs. 2 lakhs from sale of long-term listed equity shares in the month of June 2018. Is this gain exempt from tax? Whether I have to report this gain in ITR form?
The Finance Act, 2018 introduces a new Section 112A and withdraws Section 10(38) exemption for the long-term capital gains arising from transfer of listed securities, being equity shares, units of equity oriented funds or units of business trusts. As per section 112A, long-term capital gains arising from transfer of listed securities, being equity share, units of an equity oriented fund or a units of a business trust shall, be taxed at 10% in excess of Rs. 1 lakh. However, this new Section 112A would be applicable from assessment year 2019-20 i.e., all transactions of sale of listed securities on or after April 1, 2018 shall be reported in the next year ITR form applicable for A.Y. 2019-20. Thus, you are not required to report gains that is taxable under section 112A while filing income-tax return for current Assessment Year 2018-19.
Q10. I have earned a profit of Rs. 2 lakhs from sale of long-term listed equity shares in the month of March 2018. Is this gain taxable under Section 112A? Whether I have to report this gain in ITR form?
Q11. I have earned profit from intra-day trading. Is it taxable as business profit or capital gain?
Intra-day trading is considered as speculation business and the income therefrom would either be speculation gain or speculation loss. Income from speculation gains is taxed at the normal rates. However, any losses arising from speculation business are to be set off only against profit of any other speculative business.
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied