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Sec 44 AD of it act

30 March 2021

my client is filing returns since 17-18 ay under sec 44ad.
in 19-20 ay his turnover exceeds 1 crote and done tax audit filed the return.
in 20-21ay his turnover is 48 lakhs. he filed return under section 44 ad. showing profit @ 13%.
is it right

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5 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 30 March 2021

Ok there is no problem, turnover is less than 2 crores rupees

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8156046685 (CA FINAL STUDENT) (45 Points)
Replied 30 March 2021

It is valid but you have to opt for presumptive taxation u/s 44AD for consecutive 5 years until and unless your turnover exceeds threshold limit of 2 crore.

anil jain (Partner) (1072 Points)
Replied 01 April 2021

He cannot opt for 44AD now. Pl see second proviso to section 44AB and Section 44AD(4).

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 18 April 2021

Yes, Yes he is not eligible for 44AD as audit has been done

Susmita Dutta, CA , CPA (CA ) (2141 Points)
Replied 18 April 2021

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 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. The government is discouraging taxpayers from misusing the scheme and constantly 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.