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Special provision for computing profits and gains of business of civil construction.

Applicable to an assessee engaged in the business of civil construction or supply of labour for civil construction.

A sum equal to eight per cent of the gross receipts paid or payable in the previous year on account of such business or, as the case may be, a sum higher than the abovesaid sum of eight percent 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. (Applicable for the gross receipts upto forty lakh rupees).

The expression civil construction includes

  (a)  the construction or repair of any building, bridge, dam or other structure or of any canal or road;

  (b)  the execution of any other works contract.]

Special provisions for computing profits and gains of retail business.

Applicable to 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 abovesaid sum of five percent 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 .  (Applicable for the total turnover upto forty lakh rupees).

For both :

No deduction allowable towards expenses.

Where the assessee is a firm, the salary and interest paid to its partners will be deducted from the income computed subject to the conditions and limits allowable.

The written down value of any asset used for the purpose of the business  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.

Lower profits and gains than the one specified above can be claimed  if  books of account and other documents as required under the Income Tax Act are maintained and accounts are audited and  a report of such audit is furnished as required under the above said act.

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