Section 44AD

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A partnership firm with a turnover of Rs. 5.50 Lakh and a net loss of Rs. 0.25 Lakh is seeking advice on whether they can file their Income Tax Return (ITR) under Section 44AD. While Section 44AD is generally available to partnership firms, individuals, and HUFs (but not LLPs), filing under this section might result in paying tax on 8% of the turnover, even with a loss. It's recommended to consider filing under normal circumstances using ITR-3 instead.

shoeb parwaiz

shoeb parwaiz (Querist)
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25 August 2020 Dear All,

Partnership Firm has turnover of Rs.5.50 Lakh and the net loss is Rs. 0.25 Lakh. Can ITR be filed u/s 44AD?

Looking for your valuable advice.

Thanks & Regards

Shoeb

CA Ankith Jain

CA Ankith Jain (Expert)
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26 August 2020 No, don't file under 44AD, you may end up paying tax on 8% of turnover. You could file under normal circumstances i.e ITR-3. For any queries, you could contact at caankithjain@gmail.com.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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31 August 2020 The provisions of section 44AD can be adopted by such resident assessee who is an Individual, Hindu Undivided Family and Partnership Firm but not Limited Liability Partnership Firm. There is no restriction on adopting the provisions of section 44AD by both, a partnership firm as well as the partners.

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