difference between ITR 4 & 4S for AY 2017-18

In AY 17-18 ITR 4 is using for presumptive taxation scheme for Business and Profession... Sec 44ad is to business and Sec 44ada is professional....


Section 44ADA: 
Profits assumed at 50% of Sales for Professionals with Turnover of less than Rs. 50 Lakhs per annum...

Section 44ADA: Presumptive Taxation @ 50% for Professionals

The benefit of Presumptive Taxation which was earlier available only to specified businesses has now been extended to Professionals. Professionals whose Total Gross Receipts do not exceed more than Rs. 50 Lakhs in a financial year can claim benefit of this Section from Financial Year 2016-17 onwards.

The Income of any person making use of this Section would be assumed to be 50% of the Total Gross Receipts for the year. The following are considered as professionals who can make use of this Section:-

LegalMedicalEngineeringArchitectural ProfessionProfession of AccountancyTechnical ConsultancyInterior Decoration

This scheme is applicable only to a resident assessee who is an Individual, HUF or Partnership but not a Limited Liability Partnership firm.

Under this scheme, the assessee would be deemed to have been allowed the deductions under Section 30 to 38. No other deduction for expenses would be allowed to the assessee and it would be deemed that he has already claimed the deductions for all expenses.

The assessee would also NOT be required to:-

Maintain books of accounts under sub-section (1) of Section 44AA, orGet the accounts audited under Section 44AB in respect of such income.

However, in case the assessee claims that the profits and gains are lower than 50% – he would be required to prepare Books of Accounts under Section 44AA, maintain receipts of all expenses and get his accounts audited by a Chartered Accountant.

Opting in and out of Section 44ADA

A person can opt in and opt out of Section 44ADA at any time without any restriction. Unlike Section 44AD for Business, a professional can opt in and opt out at any time without the 5 year restriction. This has been explained in the below table:-

ParticularsPresumptive Taxation under Section 44ADA for ProfessionalsAY 2017-18Opts for Presumptive TaxationAY 2018-19Does not opt for Presumptive TaxationAY 2019-20Can again opt for Presumptive Taxation. No Restriction

A professional would only be required to get his books audited if he discloses his income as less than 50%. In case he opts out of Section 44ADA – in this case as well he would not be required to get his accounts audited.

*Legal
*Medical
*Engineering
*Architectural Profession
*Profession of Accountancy
*Technical Consultancy
*Interior Decoration...