Section 44AB has five clauses (a) to (e), of which clauses (b) and (d) are related to professional income. Also note all such clauses are separated by the word 'or' which means all are mutually exclusive. If clause (b) applies then clause (d) cannot apply. Clause (b) applies if presumptive scheme is NOT opted. In this case even if income is below 50 percent of gross professional receipts audit will not be required if turnover is less than 50 lakh. In this case ITR 3 has to be filed.

Clause (d) applies only if presumptive scheme is OPTED. In this case ITR 4 will be required to be filed.

In the given case querist is NOT opting for presumptive scheme thus clause (d) will not apply. He is covered by clause (b). Thus even if his income is below 50 percent no tax audit is required since his turnover is within the threshold limit of Rs 50 lakh.

If above replied view is taken then no professional can declare any income below 50 percent which is an absurd interpretation.

Hope this clarifies.

this thread was started with presumtive income of professionals.
Hence the persons who falls under sub section 1 of section 44A will get the benefit of section 44ADA and audit liabilities also arise when such professionals declare income less than. 50%. So not all the professionals but those who falls under 44A(1) are only required to get his accounts audited if declared income is less than 50% and his income is more than basic exemption.

Sorry Mr Ghosh, I have to respectfully disagree. There is no mention of the word OPTED/CHOICE/CHOOSE anywhere in 44AB(d). The word that is used is DEEMED. According to Merriam-Webster, the closest definition of deemed that we can apply here is CONSIDERED. In simple words. if assessee return is to be deemed (CONSIDERED) as per 44ADA and such income is less than the income so deemed (CONSIDERED) then he has to be audited. So it is pretty evident that legislators didn't mean opted, at the best they meant that compared to a case of 44ADA or considered as per 44ADA.

The legislators didn't mean choice here is further strengthened by the fact that they have mentioned about the choice part explicitly in the following paragraph which I am quoting here and that too with respect to 44AD:

"38[Provided that this section shall not apply to the person, who declares profits and gains for the previous year in accordance with the provisions of sub-section (1) of section 44AD and his total sales, turnover or gross receipts, as the case may be, in business does not exceed two crore rupees in such previous year:]"

This question has been debated at length in various other threads. We can refer to those as well if needed.

I hope I am able to convey the point.

No need to say sorry Mr Neeraj. It's a discussion forum where you and I may have different views. But overall objective is to learn and gain knowledge. I may be wrong also.

Now coming to your observation. What you said does it mean if a professional keeps books of accounts and his gross receipt is below Rs. 50 lakh and his income is below 50 percent, he has to go for compulsory tax audit.

I think no since he is not opting for presumptive scheme. He is maintaining full fledged books of accounts and thus he is not subject to tax audit. Your views please.

With due respect to Mr. Modi I would like to differ with your observation that the thread was started with presumptive income of professionals. Please read the query in which the querist specifically asked "whether audit liability will arise if i will file itr 3 and not filing return under presumptive manner." So it was not started with presumptive income of professionals. Your views please.

Glad to know that Mr Ghosh, definitely knowledge is my aim as well. For me the decision maker in this case would be 44AB(d). And the pivot that is making the difference is interpretation of word 'deemed'. Till a couple of months back I was myself interpreting it as choice, however upon close inspection I noticed that, that is definitely not the intent legislators had in mind. So I will have to stick to the yes Audit is required in this case. And I am glad that we appreciate each other's holding different views.

Ok Mr Neeraj your reply have gave me food for thought. I will once again do a research on this topic and come back with my new views.

Net Profit is less than 50% of Gross Receipt. So Income Tax Audit must be done.

okkay thank you every one for such a discussion and it is very correct that it will increases our practicle as well as therotical knowlege.
thank you everyone.