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Regarding section 44ad & 44ab

Varun Arora (CA Practice ) (48 Points)

06 May 2018

Financial Year 2013-14 : Turnover Less than 1 Cr : Opted for Section 44AD.

Financial Year 2014-15 : Turnover Less than 1 Cr : Opted for Section 44AD.

Financial Year 2015-16 : Turnover Less than 1 Cr : Opted for Section 44AD.

Financial Year 2016-17 : Turnover Less than 2 Cr : Opted for Section 44AD.

Financial Year 2017-18 : Turnover more than 1 Cr : Not Eligible for Section 44AD, Conduct audit under section 44AB.

Financial Year 2018-19 : ExpectedTurnover Less than 2 Cr : Can Re-Opt for Section 44AD????

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11 Replies

rama krishnan (12239 Points)
Replied 06 May 2018

very good query, as per by my view you can opt for 44AD

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Deepika Yadav (561 Points)
Replied 07 May 2018

This additional condition has been added by substituting sub section (4) of 44AD which is –

If you are opting for presumptive scheme, you must

File presumptive scheme for atleast 5 years in continuation

If you decide to show and file profits as per regular business (ITR-4) before the end of these 5 years, you will lose presumptive benefits and disallowed from presumptive taxation for the subsequent 5 years. (5 years shall be counted starting the year in which you first file usual taxes for such business).

The government is discouraging tax payers to misuse the scheme and keep changing their option often. So if you opt for presumptive continue for 5 years and if you want to opt out, you’ll be barred from resuming presumptive for a period of 5 years.

Varun Arora (CA Practice ) (48 Points)
Replied 07 May 2018

thanks Freak and Rama Krishanan

Deepika Yadav (561 Points)
Replied 07 May 2018

Freak???

rama krishnan (12239 Points)
Replied 07 May 2018

may be typographical error or auto correction... Deepika mam... don't take it seriously

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Varun Arora (CA Practice ) (48 Points)
Replied 07 May 2018

it is sorry I want to write " thanks to Deepika Yadav for such detailed analysis and early reply" but due to auto correction in Google keyboard and it is written as that.

I want to take back my reply but due to CCI limitation I cannot take it back.

Deepika Yadav (561 Points)
Replied 07 May 2018

I'm not taking seriously I m just asking him what he want to say?

rama krishnan (12239 Points)
Replied 07 May 2018

I think Varun bro has clarified.. Deepika mam.. chill..

Deepika Yadav (561 Points)
Replied 07 May 2018

Okkk Rama Krishnan

Jeeva Thangavelu (Student CA Final ) (609 Points)
Replied 07 May 2018

Hello Mr.Varun Arora. I agree with the statement of Deepika mam regarding the five year consequtive adoption of persumptive provision to prevent denial of the same for next 5 F.Y.

But there is a mistake in your querry. For the FY 2017-18 you have stated turnover to be more than 1 cr so NOT ELIGIBLE for 44AD. Its incorrect. You can still opt for 44AD for the FY 2017-18 also since your turnover didnt exceed Rs.2crores.

Section 44AB amended by Finance Act 2018 includes - "Provided that this section shall not apply to the person, who declares profits and gains for the previous year in accordance with the provisions of sub-section (1) of section 44AD and his total sales, turnover or gross receipts, as the case may be, in business does not exceed two crore rupees in such previous year". So for FY 2018-19 also it still prevails the same.

So you can opt for 44AD for FY 2017-18 as well which means you cannot be denied opting 44AD for FY 2018-19 also.