44AD

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Guest

Guest (Querist)

02 June 2017 Please explain section 44 AD(4)??? what is the intention of introducing such a provision through finance act 2016???

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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02 June 2017 The government is discouraging tax payers to misuse the scheme and keep changing their option often. So if you opt for presumptive continue for 5 years and if you want to opt out, you’ll be barred from resuming presumptive for a period of 5 years.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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02 June 2017 This additional condition has been added by substituting sub section (4) of 44AD which is – If you are opting for presumptive scheme, you must File presumptive scheme for atleast 5 years in continuationIf you decide to show and file profits as per regular business (ITR-4) before the end of these 5 years, you will lose presumptive benefits and disallowed from presumptive taxation for the subsequent 5 years. (5 years shall be counted starting the year in which you first file usual taxes for such business).

Guest

Guest (Querist)

02 June 2017 can you give me an example with different possible scenarios??

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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02 June 2017 Generally a person earning high income(say 20-30% ) show it claiming 8% income under 44AD & when they suffer loss or lesser profit(2-3%) they opt out of 44AD. It will reduce tax revenue of govt.So this scheme is introduced.

Guest

Guest (Querist)

02 June 2017 Suppose an eligible assessee has declared income under presumptive scheme for AY 2015-16 and in AY 2016-17 his income was below 8% of turnover and he chose get his accounts audited and filed his return.... In AY 2017-18 if his turnover is less than 2,00,00,000, can he declare income under presumptive scheme???

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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02 June 2017 Yes he can as they prov applicable from A.Y. 2018-19

Guest

Guest (Querist)

02 June 2017 applicable from 2017-18 or 2018-19???

Guest

Guest (Querist)

02 June 2017 44AD(4) substituted with effect from 01.04.2017..??

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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02 June 2017 Sorry From 17-18 but in A.Y.17-18 he opt for itr -4

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Guest

Guest (Querist)

03 June 2017 Still the provision is confusing-

"Where an eligible assessee declares profit for any previous year in accordance with the provisions of this section and he declares profit for any of the five assessment years relevant to the previous year succeeding such previous year not in accordance with the provisions of sub-section (1), he shall not be eligible to claim the benefit of the provisions of this section for five assessment years subsequent to the assessment year relevant to the previous year in which the profit has not been declared in accordance with the provisions of sub-section (1)."

"Where an eligible assessee declares profit for any previous year in accordance with the provisions of this section--------
( AY 2017-18 onwards????????)
and he declares profit for any of the five assessment years relevant to the previous year succeeding such previous year not in accordance with the provisions of sub-section (1),

( What is the relevance of using any of the five assessment years????
Is there any time limit for the applicability of this provision??)

Guest

Guest (Querist)

03 June 2017 If a person opts for presumptive taxation scheme then he is also require to follow the same scheme for next 5 years. If he failed to do so, then presumptive taxation scheme will not be available for him for next 5 years. Suppose a person opts for 44AD in 2017-18 and continues to opt the same for next 5 years (up to 2022-23). In the AY 2023-24 if the assessee do not opt 44AD then can he opt for presumptive scheme for AY 2024-25??

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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03 June 2017 Yes you get it right now.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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03 June 2017 But it is not compulsory to opt 44AD for 5 years , but it is given not to opt out for 5 years

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