ITR 3 - Profit Declaration

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This discussion clarifies whether a cafe shop can declare profits below the presumptive tax rates of 6% or 8% when filing ITR 3 under non-tax audit cases. Experts confirm this is permissible, provided the business hasn't opted for Section 44AD in the preceding five years. It's also clarified that declaring profits below these thresholds in ITR 3 does not automatically necessitate a tax audit by a CA, unless Section 44AD was opted out previously.

Accounts & Tax Consultant

Accounts & Tax Consultant (Querist)

08 May 2023 Respected Experts,

Can we file ITR 3 and declare profit below 8 or 6% for Non Tax Audit Cases? ( Category : Cafe Shop)

Since Opting to 44AD will cost heavy Tax liability for the business

Kindly advise

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

08 May 2023 Yes, provided sec. 44AD was not opted in any preceding five years.

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Accounts & Tax Consultant

Accounts & Tax Consultant (Querist)

08 May 2023 Thank you sir

One of my friend says, if we are declaring profit below 8 % in ITR3 (44AB) then Tax Audit by a CA is must..

Is that right sir ?

Kindly advise

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

08 May 2023 It's not correct, unless presumptive assessment u/s. 44AD was opted out in any preceding FIVE years.

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