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Itr 3

10 October 2019

Respected sir, one of my friend has filed itr in f.y. 2017-18 in sec. 44AD and in f.y. 2018-19 he has filed itr 3 due to agriculture income and nti is below Rs. 250000 and agriculture income is 400000. what will happen whether audit liability will arise..? what to do in this case...?

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10 Replies

RAJA P M ("Do the Right Thing...!!!") (127351 Points)
Replied 10 October 2019

He can file ITR 3 with sec 44ad income under the same head...

Kapadia Pravin (17249 Points)
Replied 10 October 2019

I understand you already filed iTR 3 and business income not under 44AD. is it right ?

in this case for next 5 AYs you won't be able to opt 44AD presumptive taxation.

Suresh Parmar (147 Points)
Replied 11 October 2019

Thank you sir but in year f.y.2018-19 matter of audit arise or any notice will issue ...?

RAJA P M ("Do the Right Thing...!!!") (127351 Points)
Replied 11 October 2019

I can't understand why audit is applicable...

If Assessee will be file ITR 3 with using sec 44ad for business income and agri income under exempted...

@ Mr Suresh.,

You can check out the ITR or file the ITR 3 for the Business income under 44ad and also with agri income...

Suresh Parmar (147 Points)
Replied 11 October 2019

Because sir he has filed itr 3 not under section 44ad regular with all balance sheet and profit and loss account details and when i read provision of section 44ad i came to know that when assessee has filed itr under sec. 44ad then compulsorily need to file under same sec. For 5 years if breach then compulsory audit provision applied even income shown more than 8% and turnover below 1 cr.

Thats why please suggest me sir.

RAJA P M ("Do the Right Thing...!!!") (127351 Points)
Replied 11 October 2019

Originally posted by : Suresh Parmar
	Because sir he has filed itr 3 not under section 44ad regular with all balance sheet and profit and loss account details and when i read provision of section 44ad i came to know that when assessee has filed itr under sec. 44ad then compulsorily need to file under same sec. For 5 years if breach then compulsory audit provision applied even income shown more than 8% and turnover below 1 cr. Thats why please suggest me sir.

Yes... You are correct with sec 44AD.

If the said asseessee filed his ITR as per above then Audit is applicable AD(4).

But, It's not applicable if ITR Form changed from 4 to 3. If income will be changed from 44AD to 44AA with ITR.

So, The ITR 3 can be file with 44AD...

Try to file revised ITR..

Suresh Thiyagarajan (Student) (3986 Points)
Replied 11 October 2019

1. As per sec 44AD(4), if an assessee opted for presumptive taxation u/s 44AD, then he is bound to show profit under sec 44AD for the next 5 AY. If he fails to show, then he shall not be eligible to opt sec 44AD for the next 5 years.
2. In addition to the above section, if sec 44AD(4) is applicable and assessee's income exceeds the maximum amount which is not chargeable to tax ( >Rs. 2,50,000) during the year then irrespective of his T.O he compulsorily needs to maintain BOA and conduct tax audit u/s 44AB.
3. In your case, even if your T.O is below Rs. 1 crore tax audit is mandatory by virtue of sec 44AD(5).
Please correct me if the above solution has an alternative view.

Kapadia Pravin (17249 Points)
Replied 11 October 2019

I think once you exited out from 44AD then it's not allowed to go back to 44AD by filing revised return.

Actually the provision is you have to opt 44AD at the time of filing return (obviously original return)