Professional can take benefit u/s. 44ADA turnover limit extent to 10 cr

Save Share

This query is : Resolved

Quick Summary

This discussion clarifies that professionals opting for Section 44ADA of the Income Tax Act cannot declare profits below the presumptive limit of 50% without triggering a mandatory tax audit under Section 44AB. This rule applies even if the turnover is up to ₹10 crore and a significant portion of receipts are digital. The provisions of Section 44ADA are distinct from Section 44AD, which has different criteria for presumptive taxation.

Paresh Vasani

Paresh Vasani (Querist)

06 April 2023 Can professionals declare lower profit (below 50%) under section 44ADA without getting audit u/s. 44AB turnover up to 10 crores? Like other than professional u/s. 44AD where gross receipts of more than 95% are digitally received.

let's take an example:

A professional has a gross business receipt of Rs. 2.50 cr wherein cash receipts are less than 5% and profit declared 60 Lakhs under section 44ADA, so is it allowable?

kindly guide me

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

06 April 2023 No. Both the schemes are different.
If professional declare less than 50% profit margin, tax audit u/s. 44AB(d) of IT act, is mandatory. (even if both cash receipts & cash expenditures be less than 5%).

Paresh Vasani

Paresh Vasani (Querist)

06 April 2023 Thank you so much sir

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

06 April 2023 You are welcome.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now