Can we show a presumptive income @ 6% of a partnership firm involved in a works contracts (Civil works) business and having turnover of one crore. All receipts were through bank.
And What about T.D.S., is it applicable on payment made to labour?
As per section 44AD of income tax act, 1961, partnership firm is eligible to show income under presumptive assessment @6% when total turnover or gross receipts (not more than 2 crore) received by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account.
Therefore, assessee is eligible to opt presumptive assessment under income tax act.
As per explanation provided in section 194C of Income Tax Act, 1961, firm is compulsorily have to deduct TDS while making payment. whereas there is no requirement to deduct TDS while making payment in case of Individual, HUF, Association of person or Body of individuals if there is no liability to get their accounts audited u/s 44AB of income tax act.