44-AD & Tax Audit : Ay : 20-21 Year ending March 20

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This query is : Resolved

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This discussion clarifies the rules surrounding Section 44-AD and tax audits for the assessment year 20-21. It explains that if you choose to undergo a tax audit in a given year, you will be ineligible for the 44-AD scheme for the following five years. Conversely, once you opt for 44-AD, you must remain within its provisions for five years, or you risk disqualification from its benefits for the subsequent five years.

TARIQUE RIZVI

TARIQUE RIZVI (Querist)

23 October 2020 Respected Sir,
Kindest regards to you.
Please guide me and oblige.

Total Sales Rs 1,14,62,383
6% Net Profit will arrive as at Rs 687,643 under section 44-AD
Tax Liability will arrive as at Rs 52 Thousand approximately

As a matter of fact maximum profit will remain in between 3% to 4% and in such case if we choose tax audit for the assessment year 20-21 year ending March 20

whether we will have to remain in tax audit category for all the coming 5 years
whether for all the coming 5 we wont be able to come back again in 44-AD category

CA Ankith Jain

CA Ankith Jain (Expert)

24 October 2020 Suppose for example, if u select 44AD this year and next year if u select as an under audit category, then afterwards for 5 yrs u will not be eligible for 44AD category. Once u select 44AD category u have to remain there for 5 yrs or else u will be disqualified to take benefit of 44AD for next 5yrs.