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

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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)
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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)
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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.