ITR filing Under 44AD

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A client has been using the Section 44AD scheme for income tax filing since the 2017-18 financial year and wishes to opt out for the 2022-23 financial year. The discussion clarifies that the five-year consecutive rule for 44AD starts from the 2018-19 assessment year. Therefore, for the 2023-24 assessment year, the client can opt out of the scheme without penalty. It's also confirmed that continuing with Section 44AD in the 2023-24 assessment year is permissible without restrictions.

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27 July 2023 My client had been opting 44AD from 17-18 financial year for his income tax filing. Can he opt out from 44AD scheme for his 22-23 FY income tax filing? Does this five year rule of consecutive 44AD filing includes the first year of 44AD filing ie 17-18 FY? Or this five year consecutive 44AD filing range from 18-19 FY to 22-23 FY? Experts please advice.
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
27 July 2023 Five consecutive years starts from AY 18-19 and ends at AY 2022-23. So, for AY 2023-24 he can opt out without any consequences.
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27 July 2023 Can one continue 44AD in 23-24 AY?
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27 July 2023 Thank you sir for this sudden response
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
27 July 2023 Yes, you can continue with Sec. 44AD IT act, without any restriction.
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27 July 2023 Thanks again sir for this expedited response
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
27 July 2023 You are welcome.
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