Opting ITR Form

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An individual with business income and capital gains from shares needs to file ITR-3 instead of ITR-4. The query concerns whether business income can still be declared under Section 44AD (presumptive taxation) when regular books of accounts aren't maintained. The advice given is that it's possible to opt for Section 44AD, but specific balance sheet details like turnover, debtors, creditors, and bank balance must still be provided to avoid a defective return notice.

Ajit Kumar Satapathy

Ajit Kumar Satapathy (Querist)

20 June 2022 An individual wants to file his Income Tax Return. He has basically 2 following sources of Income-
1. Business Income
2. Capital Gain from sale of shares

Earlier, he was filling ITR-4(Sugam) as he was declaring his business income under Section 44AD but now due to capital gain on sale of shares he has to file ITR-3
So, now can he still show his business income under Section 44AD and give only those details of Balance sheet that is required to be filled in 44AD business income case as regular books of accounts is not maintained by him.
Or he has to fill all the details of Balance Sheet and Profit & Loss as in the case of regular books of accounts.

Please advise and clear my doubt
If possible please attach some links of notification from the official govt. website for the resolution of this querry

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

20 June 2022 He can still show his business income under Section 44AD and give only those details of Balance sheet that is required to be filled in 44AD business income case as regular books of accounts is not maintained by him.

Ajit Kumar Satapathy

Ajit Kumar Satapathy (Querist)

21 June 2022 @CA R Seetharaman
Sir, In past years few of our assessee got notice of defective return for not filling details of Balance Sheet of regular books of accounts.
Can, you please advise how we can avoid these notices?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

21 June 2022 Select no account case and opt for 44AD and fill details in balance sheet 44AD details turnover debtors creditors bank balance has to be filled.

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