44AD(4) compulsory audit

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This query is : Resolved

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If you've opted out of Section 44AD, there's a compulsory audit requirement for five subsequent assessment years. This means you cannot opt back into 44AD during those five years. In the specific case discussed, the individual cannot use 44AD for AY 2023-24 but can potentially opt back in from AY 2024-25 onwards.

jayesh khokhariya

jayesh khokhariya (Querist)

09 September 2023 Assesses opted for 44AD in A.Y. 2017-18 and in A.Y.2018-19 Opted out so compulsory audit done from A.Y.2018-19 TO A.Y.2022-23. SO he can again opt for 44AD in the A.Y. 2023-24

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

09 September 2023 Yes he can opt for 44AD in 2023-24.

CA Prateek Garg

CA Prateek Garg (Expert)

11 September 2023 Sub section (4) bars the option of 44AD for five years subsequent to the year in which assassee opted out of 44AD. So in totality bar works for 6 years (1 year in which assessee opted out + 5 subsequent years)

In your case 44AD will not be available for AY 2023-24. However you may opt it with effect from AY 2024-25.

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