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Audit u/s 44ab(e) required or not???

priyanka (self) (23 Points)

12 July 2019

FY15-16 : RETURN FILED U/S 44AD

FY 16-17: RETURN FILED U/S 44AD

FY 17-18: TURNOVER CROSSES 2 CR SO ASSESEE AUDITED U/S 44AB(A) AND BOOKS MAINTAINED

FY 18-19 TURNOVER IS 1.5 CR CAN ASSEESEE OPT FOR 44AD AND SHOW 8% PROFIT OR IS HE REQUIRED TO GET ACCOUNTS AUDITED U/S 44AB(E) IRRESPECTIVE OF PROFIT???

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4 Replies

Saket Mishra (367 Points)
Replied 12 July 2019

assessee can opt 44AD for A.Y 19.20
since it was his obligation for F.Y 17.18 to get his books of account audited due to his turnover and not voluntary,
therefore he can again opt for 44AD for A.Y 19.20..
proviso of sec 44AD does not apply in above case...

sujithavasa (176 Points)
Replied 12 July 2019

to opt for presumptive taxation @ 8% turnover should not exceed 1 crore
in your case not eligible to opt and he is required to get his accounts audited under sec 44AB

priyanka (self) (23 Points)
Replied 12 July 2019

LIMIT U/S 44AD IS 2CR??? SO IF I SHOW 8% PROFIT AUDIT IS NOT REQUIRED RIGHT??

Suresh Thiyagarajan (Student) (3986 Points)
Replied 12 July 2019

1. From Finance Act, 2017 (FY 2017-18) assessee who have opted for presumptive taxation u/s 44AD need to show their profit under the sec 44AD for five consecutive assessment year (AY) relating to the AY in which the presumptive taxation scheme opted. Hence, if you an assessee who opted to show profit u/s 44AD during the FY 2017-18 then for 5 consecutive FY from 2018-19 to FY 2022-2023 need to show profit u/s 44AD. on failure to show the profit under the above section then he shall not be eligible for a period of 5 AY succeeding the AY in which he had not shown profit under the above section.
2. In your case, for the FY 2017-18 you have not opted for presumptive taxation scheme u/s 44AD and during the FY 2018-19 your T.O limit was less than Rs. 2 crores, hence you are eligible to avail sec 44AD and show profit @ 8% or 6% on your gross receipts or T.O If you have opted for presumptive taxation scheme u/s 44AD then you don't need to get your books of accounts audited u/s 44AB.
3. However, the important point to be noted in here is that as per sec 44AD(4) you need to show your profit u/s 44AD for a period of 5 years that is from FY 2019-20 to FY 2023-24 under the above scheme. If you fail to show then you will not be eligible for the period of 5 years succeeding the FY in which you have failed.
Please correct me if the above interpretation has an alternative view.