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opting of presumptive income

09 September 2018

Dear Fellows

Is it compulsory to opt section 44AD/44ADA if turnover/ gross receipts is within limit(ie 2cr/50lakhs) by declaring 8℅/50℅ profit.

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9 Replies

Rohit Tibrewal (Student & Senior Accountant) (3193 Points)
Replied 09 September 2018

No its upon your feasibility, if you are maintaining books of accounts then why you opt for presumtive schemes.

It is for you suitability.

If you are not maintaining books of accounts.

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RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 09 September 2018

Yes...

If Asseessee will "Opt" Presumptive Taxation Scheme then the said profit percentage is mandatory as per said sections...

1 Like

Vinod Babu (24191 Points)
Replied 09 September 2018

Yes, you are right Raja sir..

Rohit Tibrewal (Student & Senior Accountant) (3193 Points)
Replied 09 September 2018

Yes Raja Ji is correct, if you opt for Presumtive Taxation Scheme, you should show minimum of 6%-if transaction with bank/8%/50% of profit in the required column.

Chetan Sharma (8 Points)
Replied 10 September 2018

OK sir
thank you

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RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 10 September 2018

You are most welcome Dear.

Richa vaidya (Partner) (56 Points)
Replied 10 September 2018

No its completely OPTIONAL...

Suppose You have gross income of 75 L but loss of 10 L, then how can you declare 8% profit? Thats not the purpose of the section.

It is to help self assesment people who have good income declare a fixed percentage and forget about full compliance like audit etc. IT dept will not bother u...

But even if you are below 44AD/44ADA if turnover/ gross receipts is within limit(ie 2cr/50lakhs) but have less than 6/8% profit you can do an audit and file under normal ITR rules

2 Like

S ELAVARASI (ACCOUNTANT) (2975 Points)
Replied 11 September 2018

Yes... Assessee can use any option based on his suitable 44aa/ab/ad.

But,
Thr options are different its nature of act.

in case assessee will opt AD then 6% \ 8% will be shown the profit...

Correct if its wrong...

Ashwin Kumar (1234 Points)
Replied 11 September 2018

opting 44ad is optional , but once if you have opted then you will have to show a minimum 8% profit for a periode of 5 consecutive assessment years...