44AD READ WITH 44AB

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This discussion clarifies filing requirements for an assessee who previously filed under Section 44AD read with Section 44AB for AY 2018-19 and now wishes to file for AY 2019-20. It addresses whether the extended filing deadline of 30th September 2020 applies and clarifies that while there's no penalty for late filing of the return itself, a penalty may apply if the audit report under Section 44AB(e) isn't filed within the extended period.

P.Madhivadhanan

P.Madhivadhanan (Querist)
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30 July 2020 AN ASSESSEE WHO FILED THE RETURUN OF INCOME FOR AY 2018-19 U/S44AD READ WITH SECTION 44AB. NOW HE WANTS TO FILE THE RETURN FOR AY 2019-20. THE DATE OF FILING RETURN EXTENDED UPTO 30SEPTEMBER2020. I WANT TO KNOW WHETHER EXTENDED APPLICABLE TO THE ASSESSEE CASE. IF THERE IS ANY PENALTY NON FILING OF AUDIT REPORT WITHIN OCTOBER 2019

Harshit Bangar

Harshit Bangar (Expert)
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30 July 2020 Once a taxpayer opts for this scheme than it would be beneficial for him to file his next 5 year’s income tax return in the same scheme only. (Applicable From the Financial year 2016-17 i.e AY 2017-18)

But

If he decides to OPT-OUT of the scheme in any of the next 5 years than he will be DISALLOWED from this scheme for the next subsequent 5 years.

Not only this, If his total income exceeds the maximum amount not chargeable to income-tax [In AY 2019-20 for normal taxpayer it is Rs.2.5 lakh] than-

He has to keep and maintain books of accounts [section 44AA(2)], and
He will also be required to get his accounts audited (Tax Audit under section 44AB)
It’s a sort of penalty.