Sec.44AD

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Swapnali Khandekar (Querist)

16 March 2017 In Sec.44AD, we tax 8% profit on turnover and if we have to show less than, then accounts should be audited u/s 44AB provided t/o is less than 1crs. in ITR-4S. But if t/o is less than 1crs. and we are showing profit after deducting expenses from income in ITR 4 , and such profit less than 8% of turnover, then accounts need to be audited?

CA Gopal Somani

CA Gopal Somani (Expert)

16 March 2017 If an assessee claims that his profits and gains from eligible business are less than 8% of the gross receipts and whose total income exceeds the maximum amount not chargeable to tax, the asseessee shall maintain the books of account as prescribed U/S 44AA and get them audited under section 44AB of the Act.

Here the catch lies in the words "and whose total income exceeds the maximum amount which is not chargeable to income-tax"

Since the words start with ‘and’ therefore both the conditions need to be fulfilled for an assessee to be required to get his accounts audited u/s 44AB if his total income exceeds the maximum amount which is not chargeable to income-tax.

Swapnali Khandekar

Swapnali Khandekar (Querist)

17 March 2017 This means Sec.44Ad overrides all sections of expenses and if we are filing ITR-4 then also our profit should be minimum 8%

CA Gopal Somani

CA Gopal Somani (Expert)

17 March 2017 Yes, Because section 44 AD starts with "Notwithstanding anything to the contrary contained in sections 28 to 43C"

Swapnali Khandekar

Swapnali Khandekar (Querist)

17 March 2017 Thank You for your Guidance...

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