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Income tax query

28 February 2020

my client filed income tax return for a.y 2019-20 declaring income u/s 44ad and a.y 2020-21 declaring income as normal business due to commission income and trading income .kindly suggest 44ad(4) applicable or not in this case

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8 Replies

VIPINKUMAR K TIWARI (Financial Professional) (196 Points)
Replied 28 February 2020

Once you opt for U/s 44ad you can not change for five years. Commission & Trading income in not any issue in that. Only your turnover exceed above 2cr then you are allowed to change to normal filling.

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DEEPAK KUMAR (63 Points)
Replied 28 February 2020

No vipin ji pls read section carefully because section 44ad(4) applicable when assessee not comply with provision of sec 44ad(1) in any succeeding five year and in this case 44ad(1) not applicable due to eligible business

Eswar Reddy S (CFO- at NHTF) (58270 Points)
Replied 28 February 2020

You can't opt for 44AD for AY-2019-20 since there is commission income.

This leads to loss of benefit of 44AD for next 5 years .

If you opt 44AD , you have to continue for 5 years but if unable to continue then there will be 5 years bar to opt again for 44AD

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 28 February 2020

@ Mr Deepak KUMAR.,

Yes, Your doubt is exactly correct.
If You are opt out from 44ad (as Your commission income) then Your account will be fall u/s 44ad(4) and its under Tax Audit...