Section 44AD 44AB
This query is : Resolved
12 August 2026
I seek professional guidance . Assessee (Individual) business turnover less than Rs. 1.08 crore during relevant previous year actual profit morethan 8% of turnover presumed cash receipts and payments morethan 5 percent.
Is Section 44AD applicable in such circumstances? Does cash receipt and cash payment morethan 5% affect eligibilityto opt for section 44AD when turnover is below Rs.2 Crore?
Is tax audit under section 44AB required when the assessee opt for section 44AD and declare profit morethan 5%?
What is the correct interpretation of the 5% cash receipt/payment conditions appearing in the ITR audit-information schedule?
What should be selected in the ITR regarding the relevant audit-information questions?
I would appreciate an answer with reference to the specific provisions of Section 44AD and 44AB and the relevant Rules/official notifications, so that thereturn can be filed correctly.
Is Section 44AD applicable in such circumstances? Does cash receipt and cash payment morethan 5% affect eligibilityto opt for section 44AD when turnover is below Rs.2 Crore?
Is tax audit under section 44AB required when the assessee opt for section 44AD and declare profit morethan 5%?
What is the correct interpretation of the 5% cash receipt/payment conditions appearing in the ITR audit-information schedule?
What should be selected in the ITR regarding the relevant audit-information questions?
I would appreciate an answer with reference to the specific provisions of Section 44AD and 44AB and the relevant Rules/official notifications, so that thereturn can be filed correctly.
13 August 2026
1. Section 44AD Eligibility: Yes, Section 44AD is fully applicable. The 5% cash limit threshold only applies to extend the turnover eligibility limit from ₹2 Crore to ₹3 Crore. Since the turnover is ₹1.08 Crore (below ₹2 Crore), exceeding 5% cash receipts/payments does not disqualify the assessee.
2. Tax Audit under Section 44AB: Tax audit is not required. Because the assessee is declaring profits above 8% of turnover, Section 44AB(e) is not attracted.
3. ITR Reporting: Select Section 44AD as the opt-in scheme and answer "No" to liability for tax audit under Section 44AB. Fill the 6%/8% presumptive income schedule with actual profits declared (>8%).
2. Tax Audit under Section 44AB: Tax audit is not required. Because the assessee is declaring profits above 8% of turnover, Section 44AB(e) is not attracted.
3. ITR Reporting: Select Section 44AD as the opt-in scheme and answer "No" to liability for tax audit under Section 44AB. Fill the 6%/8% presumptive income schedule with actual profits declared (>8%).
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