Section 44ADA presumtive taxation and ITR-3 Schedule P & L No accounts case - No.64(ii)

Great questions, Joel! Here’s a clear breakdown regarding Section 44ADA presumptive taxation and filling ITR-3, especially about Schedule P&L (No Accounts Case - 64(ii)) and Balance Sheet (No Accounts Case - 6):

1. Is Schedule P&L No.64(ii) ("No accounts case") to be filled for Section 44ADA?

• Yes, it must be filled if you are filing ITR-3 (which is mandatory for professionals opting for 44ADA).

• This schedule is meant to report income when you have not maintained detailed books of accounts but are opting for presumptive taxation.

2. What to show in Schedule P&L No.64(ii)?

• Gross receipts (turnover) must be shown.

• Gross profit, expenses, and net profit should be left blank or zero.

• Why? Because under 44ADA, the taxable income is a presumptive 50% of gross receipts (i.e., expenses are assumed at 50%).

• If you enter gross profit and expenses here, the tax software might calculate taxable income again on top of 44ADA calculation, causing doubling of income.

3. Is it okay to show gross receipts only, and put profit, expense, net profit as zero?

• Yes, this is the correct method and commonly followed.

• This way, presumptive income under 44ADA is correctly picked up, and no duplication occurs.

4. What about Schedule Balance Sheet No.6 ("No accounts case")?

• For presumptive taxation under 44ADA, there is generally no requirement to maintain or fill detailed balance sheet details.

• You can fill only the cash or bank balance if the software insists on some value.

• Leave other fields blank or zero.

Summary: