Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

SECTION 44AB

237 views

Save Share

Varsha P

3 Points Posted on 25 March 2021

Dear All,

From Section 44 AB I understood that tax audit is not mandatory in cases where profit is shown less than 8%/6% and Section 44 AD has not opted for any previous year.

When I was entering data in ITR Form 4 (Presumptive) following warning is shown:

If income less than 8%/6%, it is mandatory to have a tax audit under 44AB and regular IT3 or ITR5 has to be filed and not this form.

Why is it so?

Attached File : 2455492 20210325101812 itr 4 converted.pdf downloaded: 59 times

Replies (4)

Quick Summary

This discussion clarifies the conditions under which a tax audit is mandatory according to Section 44AB of the Income Tax Act. It explains that if you opt for presumptive taxation under Section 44AD and declare profits below the prescribed 8% (or 6% for certain businesses), a tax audit becomes compulsory. In such cases, you cannot use ITR Form 4 (presumptive) and must file a regular IT3 or ITR5 form instead. If you choose to maintain books of accounts and show income below these thresholds, you would typically use ITR 3, not ITR 4.

Naveen

student

334 Points Posted on 25 March 2021

Tax audit is not applicable if u r maintaining books (ITR 3) and offer income less than 6 or 8%. But if u opt presumptive Taxation (44AD), it is must to show 6 or 8%. Otherwise Tax audit to be done. ITR 4 is only for presumptive Taxation. So if u want to show less than 6 or 8%, u should go with ITR 3