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Tax Audit-Section 44AD

Dev (Article Trainee.) (613 Points)

20 May 2021

I have one question.. Suppose I have never filled ITR under 44AD. This year my turnover 60 lakh and profit less than 6% but above basic exemption limit. I am also not choosing Presumptive method. is tax audit applicable? How to know if you have to consider section 44AD.

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8 Replies

CMA Poornima Madhava (CMA) (13112 Points)
Replied 20 May 2021

If you don't opt for 44AD, then no tax audit is applicable.

You may consider 44AD if min profit @ 6% can be declared.

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Sivaramaraju G (Learner) (2398 Points)
Replied 20 May 2021

If an assessee claims that his profit and gains from eligible business are less than @ 6%/8% on turnover and whose income is more than basic exemption limit then assessee has to get his books audit even though turnover is less than 1Cr as per sec 44 AB(d).

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Dev (Article Trainee.) (613 Points)
Replied 20 May 2021

What is eligible business??

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 20 May 2021

No tax is not applicable as you're not opted for 44AD.

for opting presumptive taxation you have to show profit @ 8% of turnover and turnover should be upto 2 crores rupees

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Sivaramaraju G (Learner) (2398 Points)
Replied 20 May 2021

Any business other than business specified u/s 44AE i.e. Sec 44AE of Income tax act states that small business engaged in the business of plying, hiring or leasing goods carriages having not more than ten goods carriage vehicles.

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Lotus Agrawal (Practice) (1361 Points)
Replied 20 May 2021

No, if you do not opt for 44AD then tax audit is not required.

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veerendar singh (tax consultant) (3301 Points)
Replied 20 May 2021

There exists no concept of opting in and opting out/not opting at all.
section 44ad applies automatically to all eligible persons.
if any eligible person's profit is below the prescribed % then he has to get books audited.

i think as per section 44ad read with section 44ab you will have to maintain books and audit is mandatory.

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