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What are the audit requirements u/s 44AB when discontinuing the 44AD scheme?

03 April 2019

An assessee wants to discontinue the presumptive taxation scheme u/s 44AD and opt for regular assessment having 90 lakh turnover. Is it mandatory to get the books audited under section 44AB?

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12 Replies

CHAVDA SANJAY MANSUKHBHAI (proprietor) (402 Points)
Replied 03 April 2019

YOU HAVE TO AUDIT U/S 44AD OF BOOK OF ACCOUNT AND FILE THE INCOME TAX RETURN.

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CHAVDA SANJAY MANSUKHBHAI (proprietor) (402 Points)
Replied 03 April 2019

YOU HAVE TO AUDIT U/S 44AD OF BOOK OF ACCOUNT AND FILE THE INCOME TAX RETURN.

Abinaya Eswaran (43 Points)
Replied 03 April 2019

yes it is mandatory to audit BOA if he opts for regular assessment

1 Like

RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 03 April 2019

Yes... Audit required if Assessee opt out sec 44AD..

Ab . . . kallolli (38 Points)
Replied 03 April 2019

whether 44AB still continues even after opting regular assessment subsequently

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RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 03 April 2019

Yes... It's applicable to next five AY.

If a person opts for presumptive taxation scheme then he is also require to follow the same scheme for next 5 years. If he failed to do so, then presumptive taxation scheme will not be available for him for next 5 years. [For example, an assessee claims to be taxed on presumptive basis under Section 44AD for AY 2017-18. For AY 2018-19 and 2019-20 also he offers income on basis of presumptive taxation scheme. However, for AY 2020-21, he did not opt for presumptive taxation Scheme. In this case, he will not be eligible to claim benefit of presumptive taxation scheme for five Assessment Years, i.e. from AY 2021-22 to 2025-26.]

He is required to keep and maintain books of account and he is also liable for tax audit as per section 44AB from the AY in which he opts out from the presumptive taxation scheme. [If his total income exceeds maximum amount not chargeable to tax]

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Ab . . . kallolli (38 Points)
Replied 03 April 2019

e g ; first 17-18 AY if assesses file 44AD , 18-19 assesses file regular assessment & 19-20 ? ( even though the turnover is less than 100 lakh )

RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 03 April 2019

( even though the turnover is less than 100 lakh )
- Yes...

first 17-18 AY if assesses file 44AD , 18-19 assesses file regular assessment ...

- Yes... If Assessee opt out from 44ad in the AY 18-19 then He must file five AY under sec 44AB (AY 18-19, 19-20, 20-21, 21-22, 22-23)