Breakage of 44ad

I wonder why you want to invite audit liability for next five years, by opting out from Sec. 44AD in this year.

Audit is not mandatory for this year, but error may trigger IT query if future.

Even if you declare income at 6/8% of the turnover under sec. 44AD, the total income would be below 5 lakhs, as such tax liability after rebate will be Nil...

Bank transactions can be declared at 6% margin.

Make them aware about tax audit liabilities to be faced for next 5 years.

This is what Section 44AD(4) has to say

Where an eligible assessee declares profit for any previous year in accordance with the provisions of this section and he declares profit for any of the five assessment years relevant to the previous year succeeding such previous year not in accordance with the provisions of sub-section (1), he shall not be eligible to claim the benefit of the provisions of this section for five assessment years subsequent to the assessment year relevant to the previous year in which the profit has not been declared in accordance with the provisions of sub-section (1)

It clearly says that if a person opts out of provisions of this section, it would be mandatory for him to get his books audited for the next 5 years irrespective of whether the income is taxable or not.

Please read difference between sub sec. 44AD(4) & sec. 44AD(5)....

Liability of audit is specified u/s. 44AD(5)...

As per sec 44AD of income tax act a sum equal to 8% or 6%(if gross receipts are from account payee cheque or electronic clearing system) of TOTAL GROSS RECEIPTS should be declared in his return of income and that shall be deemed to be the income.

Section 44AD(4) will attract the year when the assessee declares the profits less than 8% or 6%. The taxpayer will not be eligible to opt for a presumptive income scheme for the next five years