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Section 44 AD - Tax Audit

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Ravinder

Learning CA

23 Points Posted on 28 January 2021

If anyone is aware please do answer.

(a) If the business turnover is less than 01 crore and income is more than 6% (Digital Transactions), then can the assessee file ITR-3 form? Or is it mandatory to opt Section 44AD (Presumptive Scheme) and file ITR 4S?

(b) If the assessee doesnt opt Section 44AD and willing to show income less than 6%, then maintenance of Books and Tax Audit mandatory irrespective of Turnover (even for 15-20 Lakhs turnover)?

Replies (3)

Quick Summary

This discussion clarifies the applicability of Section 44AD (Presumptive Scheme) for businesses with turnover under £1 crore but income exceeding 6% of digital transactions. It addresses whether ITR-3 is an option or if ITR-4S is mandatory. Furthermore, it explores the requirements for maintaining books of accounts and conducting tax audits if the presumptive scheme isn't opted for and lower income is declared, even for businesses with turnovers between £15-20 lakhs. The rules for new businesses and stock market trading are also briefly touched upon.

CA. Sourav Sarkar

Chartered Accountant

16188 Points Posted on 28 January 2021

A) in that case you should file itr 3
b) not required for maintenance of books as turnover is less than 2500000 rupees

SOHAN LAL

Manger Accounts & Finance

244 Points Posted on 28 January 2021

A) Not mandatory opt 44Ad, it's optional
b) if you showing income below 6% or 8 % of turnover than tax audit compulsory

Ravinder

Learning CA

23 Points Posted on 29 January 2021

@ Sourav

Rule is:

If the sale/turnover/gross receipts from the business or profession is more than Rs. 25,00,000 or the income from business or profession is more than Rs. 2,50,000 in any of the 3 preceding years, then books of accounts will be compulsorily maintained.

What if the business is a new one. Should they maintain books even for the first Financial Year?

What books should one maintain if the business is stock market trading? Just a report from the stock broker would suffice?