Go AD-Free with CAclubindia Pro and get a FREE CCI Coffee Mug. Subscribe Now!

44AD Presumptive

20 December 2018

Sir last year me took 44ad now i wanna to file itr3 by showing less than 6% profit.. Mine turnover is 68lakah and i maintained books of account .. Should i compulsory get audit by 44ab... Or may I file direct.

Reply
Follow
Share

16 Replies

Suman Dan (6 Points)
Replied 20 December 2018

Have to be audited before filing.

Upgrade to CAclubindia Pro. Subscribe Now!

Balram Choudhary (Sr. Accountant) (112 Points)
Replied 20 December 2018

Dear,

as per 44ad if profit shown below 8% (cash transaction and 6% in case of banking transaction) or turnover greater than Rs. 2 crore audit is compulsory.

1 Like

Saheblal Kamalanavar (25 Points)
Replied 20 December 2018

these year me left presumptive and my turnover 65 lakh... I shown less than 6%profit than no need to audit?

Balram Choudhary (Sr. Accountant) (112 Points)
Replied 20 December 2018

please clear the concept the presumption basis income,

audit required if

turnover greter than 2 cror or profit shown less than 8 % or 6 %,there is no matter previous year you have opt presumption basis for computation of income or regular basis,

thus your turn over in this year is 65 lakh,you can show profit

greter than 6 or 8% no audit or

less than 6 or 8% audit require

Saheblal Kamalanavar (25 Points)
Replied 20 December 2018

Oho right thanks sir....

Some consultance said if you are shown profit more than 8% than you need not required to maintaince books of account.. If you wanna to show less than 8% profit than you should maintain books of account.. And till 1 crore turnover you need not required audit... Is it correct?

Upgrade to CAclubindia Pro. Subscribe Now!

Nitesh bind (Student CA Final ) (12692 Points)
Replied 20 December 2018

I think you are totally confused with the Books and Audit; Let's dig deeper into it-

First understand the concept of maintaining books u/s 44AA;

In General: Businesses required to keep and maintain books of accounts if their Profit of Business exceeds or expected to exceeds Rs. 1,20,000 OR Turnover exceeds Rs. 10,00,000 then you need to maintain books of Accounts.

Now see special cases; Whenever you did not fulfil the conditions of Presumptive taxation under any section (e.g. 44AD, 44ADA, 44AE or 44B series) then you have to maintain the Books + have to audit those books.

Now Coming to Audit Section i.e. 44AB;

In General: See Audit is required to be done if your Turnover exceeds Rs. Rs. 1 crore (not to confused with 2 crore limit given under secrion 44AD because that is for Turnover for Presumption and not for Audit) in preceeding year.

Special Case: Same as for section 44AA i.e whenever you do not fulfil the conditions of Presumptive taxation then you need to get your Books done + Audit shall also be done.

NOW YOUR CONCERN WITH SECTION 44AD:-

As per 44AD; if your Turnover is up to Rs. 2 crore (+) you show minimum 6% (for online Txn.)/ 8% (for other txn Including cash) profit of your Turnover then you are eligible to opt for 44AD.
As per Your Query; Your turnover is 68 lakh but you are showing profit below the minimum expected profit (i.e. 6%/8%) so you have to;
Maintain books (+) Audit shall also have to be done.

LOGIC- As the Govt has fixed these percentage on a logical basis and as per normal industry rates but if you are having even less than 6% or 8% profit then Govt thinks that something is doubtful there and that's why logically Govt wants to get your accounts audited.

IMPORTANT POINT- BEFORE VOLUNTARILY EXITING FROM 44AD KEEP THIS THING IN YOUR MIND THAT IF YOU VOLUNTARILY GET OUT OF 44AD SECTION THEN AS PER SECTION 44AD(4) YOU CANNOT OPT IT AGAIN FOR NEXT 5 YEARS EVEN IF NEXT YEAR FULFIL ALL THE CONDITIONS.

I hope your query would be satisfied now. And Now make your judgement as per your own discretion.

Thanks. Be Helpful to One Another!

13 Like

Saheblal Kamalanavar (25 Points)
Replied 20 December 2018

Nitish sir thanks for giving your valuable time for me... Really i was confused very much about audit and books of account.. Now i'm totally understood all the fact.. Thanks very much.

Nitesh bind (Student CA Final ) (12692 Points)
Replied 20 December 2018

You are most welcome brother. Thanks & Be Helpful to One Another!

5 Like

Saheblal Kamalanavar (25 Points)
Replied 20 December 2018

Your one another concept also I liked too much and even kept status also... Thanks to you all for supporting..

Nitesh bind (Student CA Final ) (12692 Points)
Replied 20 December 2018

Ha Ha Ha... It's not any Concept my brother. It's a "Thought". Just think for a second if everyone start to help each other, the society and the nation and the whole world would be so so nice. Isn't it? Just saying..!

Anyways you like it, I feel happy for that. See my smile. :D 😀

3 Like

Upgrade to CAclubindia Pro. Subscribe Now!

prasad Nilugal ( GST Practitioner & Accounts ) (14863 Points)
Replied 20 December 2018

I think in 44 AA as per finance act 2018 W.E.F 1/4/2018 profit should exceeds 250000/- and sales 2500000/- for maintance of books of accounts please confirm

Nitesh bind (Student CA Final ) (12692 Points)
Replied 20 December 2018

Yes, My Answer is as per Current year i.e. A.Y. 2018-19.

Amendment by FA, 2018 (Applicable for AY 2019-20) -

The Amount of Rs. 1,20,000 & Rs. 10,00,000 shall be changed by 2,50,000 & 25,00,000 respectively. But this amendment Applicable only in case of INDIVIDUAL/HUF.

2 Like