44ADA,44AA, itr3

"Question is, if ITR4 can bypass & ignore 44AA for doctors, why can 44AA not be ignored or set to "No" in ITR3." ........... Correct............

ITR4 is specifically for presumptive assessment, but do not have capital gains declaration.

If a doctor assessee files return u/s. 44ADA, but also has capital gains declaration, he is required to file ITR3, but that doesn't change his presumptive tax criteria.

It is only if he doesn't declare his professional income under sec.44ADA, than he is required to maintain all the said books of accounts as per sec. 44AA, and file ITR3 with BS and P&L accounts.

Though penalty may not be levied, because of no additional tax liability, but it depends upon no. of transactions or amount of gain or TDS deduction etc........

I am a doctor having some salaried income and some from professional practice. I also have a small income from foreign country as a consultant. I therefore filed ITR 3 in AY 2018-19 as I need to show foreign income in Schedule FSI which is not present in ITR4.

As I do not maintain books of account, I opted for Presumptive Income from Profession (44ADA) and thus selected the No Accounts Case in ITR 3 (General Section).

On Balance Sheet page, I filled only sec 6 (No Accounts Case) as follows:

Sundry Debtors = 0

Sundry Creditors = 0

Stock in trade = 0

Cash balance = 0

On Profits and Loss Account page, I filled only sec 53 (ii) for Professions (No Accounts Case) as follows:

Gross Receipts = 900000/-

Gross Profit = 450000/- (i.e 50% of Gross Receipts to show Presumptive Income)

Expenses = 0

Net Profit = 450000/-

The Schedule BP - Computation of Income from Business or Profession thus reflected:

A: From Business or Profession

1: Profit before tax as per profit and loss account (item 45 and 53 of Part A-P and L ) = 450000/-

4. Profit or loss included in 1, which is referred to in section 44AD/44ADA/44AE/44B/44BB/44BBA/44BBB/ 44D/44DA/ Chapter-XII-G/ First Schedule of Income-tax Act = 450000/-

36. Profits and gains of business or profession deemed to be under - ii Section 44ADA = 450000/-

37. Net profit or loss from business or profession other than speculative business and specified business (35 + 36xi)) = 450000/-

38. Net Profit or loss from business or profession other than speculative business and specified business,after applying rule 7A, 7B or 8), if applicable (If rule 7A, 7B or 8 is not applicable, enter same figure as in 37) (If loss take the figure to 2i of item E) = 450000/-

The computation of income page thus reflected:

PART B - TI (Computation of Total Income)

3. Profits and gains from business or profession

i Profit and gains from business other than speculative business and specified business (A38 of Schedule-BP) (enter nil if loss) = 450000/-

vi Total (3i + 3ii + 3iii + 3iv + 3v) (enter nil if 3vi is a loss) = 450000/-

However, I still received a notice u/s 139(9) with error code 311 that "Taxpayer having income under the head Profits and gains of Business or Profession but has not filled Balance Sheet and P & L Account...". The probable resolution that the notice mentions is "The Part B of the P & L account and part B of the Balance Sheet (i.e. No Account Case Section) should be entered in the corrected return.."

But as you can see above, i have indeed filled data for both P&L and Balance Sheet under presumptive income by taking 50% of Gross Receipts. And I have filled all the other sections to show my salary and other income. Still I am getting this notice. Please help. Thanks.

All these years i filed in ITR4 presumptive income 44ADA.

For AY2024-25 Mistakenly I filed used ITR3 for my wife (Doctor) but filled presumptive income details 44ADA + FD interest details under other source of income.  ( But there was no salary OR sale of Mutual Funds or STCG or LTCG only got MF Dividend). so technically i should have chosen ITR4-Sugam. is last return a defective one ? But ITR was processed and got refund also. 

Will system allow to file revised return ? if not can I file a updated return using ITR4 under presumptive income 44ADA for AY2024-25 before 15sep25 ? 

can i ignore last year filing and continue to file ITR for AY2025-26 as there is only presumptive income + FD interest income + MF Dividend ? or should i file updated return for last year and then file for this year ?

1. No. It is not defective.
2. Not required.
3. You can file current year return without any hitch to last year's return.