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Section 44AD

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Amit Jain

Proprietor

538 Points Posted on 27 March 2021

If an assessee filed his Income Tax Return opting Sec 44AD presumptive taxation scheme in 2017-18. In 2018-19 he has not filed his Income Tax Return because his income was below the taxable limit.

Now my question is whether he can opt sec 44AD presumptive taxation scheme in 2019-20.

Replies (7)

Quick Summary

This discussion clarifies the eligibility for Section 44AD presumptive taxation. An assessee who opted for Section 44AD in 2017-18 and did not file an Income Tax Return in 2018-19 due to income below the taxable limit can still opt for Section 44AD in 2019-20. While there's no strict five-year mandate, opting out means ineligibility for the next five years. It's advised to file an ITR annually for continuity, even if income is below the taxable threshold.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 27 March 2021

Yes he can opt 44AD as it is to be maintained for 5 years

CMA Poornima Madhava

CMA

13117 Points Posted on 27 March 2021

As I understand, 44AD can be availed since the income does not exceed basic exemption limit.

Moreover, there is no compulsion to avail 44AD for continuous 5 years. However, if 44AD is not availed for 5 continuous years, then the assessee will not be eligible to avail 44AD for 5 years from the year in which the assessee opts out of 44AD.

Kapadia Pravin

17269 Points Posted on 27 March 2021

You must file IT return for continuity sake even if it's below taxable limit. You may exit anytime from 44AD but in that case you won't be able to take benefit of 44AD for next 5 years