Income tax query

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63 Points Posted on 28 February 2020
my client filed income tax return for a.y 2019-20 declaring income u/s 44ad and a.y 2020-21 declaring income as normal business due to commission income and trading income .kindly suggest 44ad(4) applicable or not in this case
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On 28 February 2020 at 15:58 Report
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This discussion addresses a client's income tax query regarding the applicability of Section 44AD for Assessment Year 2019-20 and 2020-21. The core issue is whether the client can opt for Section 44AD when they have commission and trading income, and if this impacts the ability to switch to normal business filing in subsequent years. Experts debate the implications of Section 44AD(4), particularly concerning the five-year restriction on opting back in if the assessee fails to comply with Section 44AD(1) provisions.

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Financial Professional
196 Points Posted on 28 February 2020

Once you opt for  U/s 44ad you can not change for five years. Commission & Trading income in not any issue in that. Only your turnover exceed above 2cr then you are allowed to change to normal filling.

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On 28 February 2020 at 16:44
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63 Points Posted on 28 February 2020
No vipin ji pls read section carefully because section 44ad(4) applicable when assessee not comply with provision of sec 44ad(1) in any succeeding five year and in this case 44ad(1) not applicable due to eligible business
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On 28 February 2020 at 17:05
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CFO- at NHTF
58280 Points Posted on 28 February 2020
You can't opt for 44AD for AY-2019-20 since there is commission income.

This leads to loss of benefit of 44AD for next 5 years .

If you opt 44AD , you have to continue for 5 years but if unable to continue then there will be 5 years bar to opt again for 44AD
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On 28 February 2020 at 17:12
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"Do the Right Thing...!!!"
128162 Points Posted on 28 February 2020
@ Mr Deepak KUMAR.,

Yes, Your doubt is exactly correct.
If You are opt out from 44ad (as Your commission income) then Your account will be fall u/s 44ad(4) and its under Tax Audit...
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On 28 February 2020 at 17:17
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CFO- at NHTF
58280 Points Posted on 28 February 2020
Yes .Agree
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On 28 February 2020 at 21:26
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63 Points Posted on 29 February 2020
No i have raised this query in cbdt
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On 29 February 2020 at 08:31
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CFO- at NHTF
58280 Points Posted on 29 February 2020
Don't worry ,you will get reply in few days.

If the query sent to CBDT chairman then you get reply very shortly
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On 29 February 2020 at 19:25
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63 Points Posted on 01 March 2020
Cbdt chairmain clear this issue easily
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On 01 March 2020 at 10:07

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