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Presumptive income 44ad

Shrividhya (CA Final Student) (74 Points)

22 June 2018

A company has a turnover of morethan 2 crores for the AY 17-18 and the tax audit is duly filed. for the current AY 18-19 the turnover is less than a lakh. Whether we can opt for presumtive income scheme 44AD this year? If the turnover for next AY 19-20 exceeds two crores can we convert to tax audit again? kindly help me with the presumtive income 5 yr scheme.

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5 Replies

Sarath Rajendran (Nil) (2791 Points)
Replied 22 June 2018

If you are opting for the presumptive scheme, you must

a. File presumptive scheme for at least 5 years in continuation

b. If you decide to show and file profits as per regular business (ITR-3) before the end of these 5 years, you will lose presumptive benefits and disallowed from presumptive taxation for the subsequent 5 years.

Please note that 5 years shall be counted starting the year in which you first file usual taxes for such business.

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Shrividhya (CA Final Student) (74 Points)
Replied 22 June 2018

"A person can declare income at lower rate (i.e., at less than 6% or 8%), however, if he does so, and his income exceeds the maximum amount which is not chargeable to tax, then he is required to maintain the books of account as per the provisions of section 44AA and has to get his accounts audited as per section 44AB"

so according the above statement, a company less than 2cr turnover can show income less than 6 or 8% but if the income is less than 2.5lakhs he is not liable for tax audit?

Eg. if a company turnover is 4,00,000 and he disclose 5% income that is rs. 2,00,000 he is not liable to Audit and maintain books?

CA ABHAY GUPTA (Practice) (3230 Points)
Replied 22 June 2018

The scheme can be adopted by a resident individual, resident Hindu Undivided Family (HUF) or resident Partnership Firm (not Limited Liability Partnership (LLP))

thus being a company u r not allowed to declare your income in this section

Shrividhya (CA Final Student) (74 Points)
Replied 25 June 2018

Thank you, Im my case my client filing for last 2 years and we are preparing tax audit. But this year his turnover is less so whether we can choose 44AD?

RAJA P M ("Do the Right Thing...!!!") (128062 Points)
Replied 25 June 2018

Originally posted by : Shri
	Thank you, Im my case my client filing for last 2 years and we are preparing tax audit. But this year his turnover is less so whether we can choose 44AD?