Presumptive income wrongly u/s 44ADA INSTEAD of 44AD

This query is : Resolved

Jeeva Sugumar (Querist)
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15 January 2020 Hi,

I am a self-employed Management Consultant. I possess no professional qualifications (Legal, medical, engineering or architectural, accountancy profession, technical consultancy, interior decoration or any other profession notified by the Board in the official gazette) falling under 44ADA. I receive the fee directly into my bank account.

I request your advice and guidance on the following :-

1. AY 2017-18
Brief background:
The original ITR3 Return filed ON time; Received the Intimation u/s 143 (1); And received the Refund also.

I realize now that in the original ITR-3 return filed, I shown the presumptive income wrongly u/s 44ADA at 50% INSTEAD of u/s 44AD at 6%. I am entitled to receive an additional Refund (amounting to Rs.1.28 Lacs).

Following are the relevant details :-
AY 2017-18 As per original ITR3 ITR Rectification/Revision being sought
Filed on 30-Jul-2017
Income from House Property 2,32,830 2,32,830
Income from Business (u/s 44ADA - 50% of Rs.19,90,862)
9,95,432 (u/s 44AD - 6% of Rs.19,90,862)
1,19,900
Total Income 12,28,261 3,52,730
Deductions (2,29,385) (2,29,385)
Taxable Income 9,98,880 1,23,345
Tax Payable 1,28,519 0
TDS 1,97,094 1,97,094
Refund Received 68,575 68,575
Balance Refund to be received ==>> 1,28,519

Please guide me :-
a) to the process of filing the Rectification/Revised Return so that I could get the balance Refund amount.
b) Additionally, let me know whether I can use ITR-4 form as against ITR-3 form originally filed.

2. AY 2018-19
Brief background:
The original ITR4 Return filed ON time; Received the Intimation u/s 143 (1); And received the Refund also.

I realize now that in the original ITR-4 return filed, I shown the presumptive income wrongly u/s 44ADA at 50% INSTEAD of u/s 44AD at 6%. I am entitled to receive an additional Refund (amounting to Rs.2.87 Lacs).

Following are the relevant details :-
AY 2018-19 As per original ITR4 ITR Rectification/Revision being sought
Filed on 31-Jul-2018
E-filing Ack. Ref. 967248420310718
Income from House Property 2,06,105 2,06,105
Income from Business (u/s 44ADA - 50% of Rs.29,92,069)
14,96,035 (u/s 44AD - 6% of Rs.29,92,069)
1,79,530
Income from other source 1,02,770 1,02,770
Total Income 18,04,910 4,88,405
Deductions (2,50,884) (2,50,884)
Taxable Income 15,54,030 2,37,520
Tax Payable 2,87,070 0
TDS 2,99,214 2,99,214
Refund Received 12,144 12,144
Balance Refund to be received ==>> 2,87,070

Please guide me :-
to the process of filing the Rectification/Revised Return so that I could get the balance Refund amount.

3. ADDITIONAL BRIEFING
a) As an additional information, I wish to state that for AY 2019-20, I filed the ITR showing the presumptive income CORRECTLY u/s 44AD at 6% choosing the business code as 16019 – (Other professional services n.e.c.) and received the Intimation u/s 143 (1) and received the Refund also.
b) I gather the following information from the internet but wanted to seek experts’ inputs from the forum :-
• One can submit a rectification request after the income tax return is processed or on receiving an Intimation u/s 143(1).
• If on rectifying a ‘mistake’ there is a change in Income – a rectification should not be filed. In this case, a Revised Income Tax Return should be filed. No new deductions or exemptions are allowed to be claimed.
• One can file a rectification request within four years from the date of the order that needs to be rectified, not necessary the original order. Thus, even after you file a rectification request and there continues to be an error in the revised order, you can file another rectification within four years from the date of the revised order.
c) Last but not the least, I talked in person with couple of auditors on the above but some say ignore and some give me different different processes. I am clueless as to how to go about. But I am sure my case is genuine and I do not wish to lose my legitimate claim to seek additional refund.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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15 January 2020 There is no provision in Section 44ADA or 44AD of the Act which allow you to reduce your income on rectification as once you have declared higher income of business/profession it is final from your side. In a case where your TDS is also deducted U/s 194J , now it is very difficult to get any "Presumptive Relief" by becoming a businessman from a professional.

Amol S Joglekar

Amol S Joglekar (Expert)
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15 January 2020 Please note that the % specified in the respective sections are of "not less than type"....... that is to say..in 44AD, it says a sum equal to 8 % / 6% or a sum higher than the aforesaid sum........So to say , in your case although your section number may be wrong, but % can NOT be presumed to be erroneous.

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