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Tax audit

varun (student) (49 Points)

02 May 2017

Sir is there any condition for 44 AD that you will have to file presumptive income return for continuous 5 years. If you exit from it, tax audit liability will be imposed?

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3 Replies

Mopidevi Bharadwaja (Article assisstant) (167 Points)
Replied 02 May 2017

Yes from AY 2017-18 if you opt for Presumptive taxation you need to follow the same scheme for five assessment years and if you are out of the scheme earlier to this you will not be eligible to file returns under this scheme for Next five consecutive years and you will require to maintain books from the year you failed to follow Presumptive taxation and also for next five years But here Tax audit is not mandatory unless the amount crosses 2 Crores in case of Business and 50Lakhs in case of profession

Example:

Let us say a business opts for PTS under section 44AD of the Act for AY2017-18, and then for AY2018-19 and 2019-20 too. But for AY2020-21, it opts out. In this case, the business will not be able to opt for PTS for the next 5 assessment years, i.e., from AY2021-22 to AY2025-26.

Hope this is helpful to you

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sowmya (audit assistant) (228 Points)
Replied 02 May 2017

sir Mopi Devi Bharadwaj in the website of income tax department the same as well explained by you it has been given that the same is effective from 01.04.2017 could you plz clarify whether the same is AY or FY