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Section 44ADA

Parth Patel (C.A.) (75 Points)

17 May 2017

if specified professional has even 7-8 lac gross receipts, then also Audit is mandatory? is there any lower limit where 44ADA not applicable?

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8 Replies

Farhaad Jiwani (Tax Consultant at Nagpur) (303 Points)
Replied 18 May 2017

44ADA is optional like 44AD, if you want to opt you can otherwise go for maintaining books of accounts.

1 Like

Karan (Article) (40 Points)
Replied 18 May 2017

There is no such lower limit.

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 18 May 2017

One such 'lower limit' is 'basic exemption limit'::: No audit liability, even u/s.44ADA, if total taxable income is below........

1 Like

MOHD AFROZ (STUDENT) (1475 Points)
Replied 18 May 2017

Agree with Dhirajlal Rambhia sir view.

Sunil Sharma (CMA & CS) (584 Points)
Replied 18 May 2017

For professionals to be under Tax Audit should have professional receipts more than 50 lacs for f.y 16_17 so in this case as your income is well below you are not required for tax audit
coming to your second question 44ada it's an presumptive section for professional where if you have less than 50 l as your receipts the either of the two you can get with ie. 50% of your tax receipts or income from profession highest among the two.
It's not mandatory to go with 44ada but upto you weather you would like to go presumptive or going to maintain books of accounts and pay tax generally.

hope this would have clarified your doubt

Naveen Kumar Jain (Chartered Accountant) (640 Points)
Replied 18 May 2017

If you maintain accounts but your profit is below 50% of gross receipts, even though you are not opting for 44ADA, you will be required to get audit done. So in effect or practically, you do not have option other than 44ADA, as you do not gain any advantage by not choosing 44ADA.

CA Karishma Chawla (CA) (271 Points)
Replied 22 July 2017

No nothing like that. No provision says that & that cannot be the intention of law! It is for the ease of business and to increase compliance burden of professionals! When one is not adopting Section 44ADA , under regular scheme they can maintain books of accounts and show actual profits even below 50% without an audit because the limit is 50 Lakhs! It is foolish how professionals cannot interpret it.

RAJA P M ("Do the Right Thing...!!!") (127133 Points)
Replied 22 July 2017

Yes Mr. Karishma.,
44ADA is not advisable. Bcoz, It's very very large package to govt.
Only advisable to maintain books of accounts. And any big firms then go to Audit....