Section 44AD- Voluntary or Compulsory scheme

I just wanted to know whether 44AD presumptive scheme is Voluntary or compulsory scheme. If I'm a business owner having business loss, do I have to still apply section 44AD or I have to do tax audit because I'm not applying 44AD or I can file normal return without audit and claim loss?

Replies (4)
Quick Summary
Discussion on whether Section 44AD presumptive taxation is voluntary or compulsory. Members clarified that taxpayers may opt for normal taxation and declare actual losses, but tax audit applicability depends on turnover, prior 44AD usage, and income conditions under Section 44AB.

Section 44AD is voluntary, not mandatory. A taxpayer can declare actual profit/loss instead of presumptive income. However, if income shown is lower than prescribed presumptive rates and total income exceeds exemption limit, tax audit requirements may arise under section 44AB.

So if I declare loss during the year then I have to get my accounts audited , right ?

If you had not opted presumptive assessment u/s. 44AD in any of the preceeding FIVE years (or if it is your first year of  business income declaration); you can file return under normal scheme and if your total turnover is below rupees one crore; you can declare loss without tax audit requirement.

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