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Simultaneous use of 44ada and 44ad?

08 March 2024

Hi. Iam a doctor by profession. I use itr 4 and 44ada for my returns. This year i have income from f&O trading and capital gains also. I need to file itr 3 this year. I have few queries

1 . Can calim both 44ada for profession and 44ad for f&o as presumptive income or

2. Claim 44ada for profession and f&o income as business income as per tax slab - do i need to maintain book of records here.

3. Do i need to pay advance tax for f&o

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24 Replies

RAJA P M ("Do the Right Thing...!!!") (127177 Points)
Replied 08 March 2024

1. No
2. Yes
3. Yes, If crossed the Tax Liability as per limit.

Danish Abbas (153 Points)
Replied 08 March 2024

Yes I agree with Raja PM

CA Rashmi Gandhi (Chartered Accountant) (86250 Points)
Replied 09 March 2024

1. Yes you can opt
2. No books of records required if income declared in 44AD & 44ADA only.
3.Yes if tax is more than 10000

2 Like

RAJA P M ("Do the Right Thing...!!!") (127177 Points)
Replied 09 March 2024

@ Rashmi Gandhi,

As you said 1 is yes & 2 is no...

Means F&O income is 44ad...???

CA Rashmi Gandhi (Chartered Accountant) (86250 Points)
Replied 09 March 2024

Yes , I have done about 20-25 audits and return of f&o only this year and every return processed successfully

1 Like

Santhosh Devulapally (20 Points)
Replied 09 March 2024

Ok. There is a mixed opinion about both 44ada and 44ad. Some ppl say we can use both and some say we cant use both at the same time. Which one is correct? Can you clarify on this. Thank you

Santhosh Devulapally (20 Points)
Replied 09 March 2024

What are books of accounts / documents to maintained for itr purpose. Generally all transactions are done online in f&o

CA Rashmi Gandhi (Chartered Accountant) (86250 Points)
Replied 09 March 2024

I will share you return of the person who has claimed both sections.

Books are not required as you have opted for presumptive taxation.

RAJA P M ("Do the Right Thing...!!!") (127177 Points)
Replied 09 March 2024

Originally posted by : Santhosh Devulapally
	Ok. There is a mixed opinion about both 44ada and 44ad. Some ppl say we can use both and some say we cant use both at the same time. Which one is correct? Can you clarify on this. Thank you

Sir,

The F & O income can't be file under presumptive scheme.

It must be file u/s 44AA .

So, It's not advisable for presumptive scheme as per above reply by the EXPERT.

Bcoz, It's very much problem.

Ask others opinion as well

RAJA P M ("Do the Right Thing...!!!") (127177 Points)
Replied 09 March 2024

Originally posted by : CA Rashmi Gandhi
	Yes , I have done about 20-25 audits and return of f&o only this year and every return processed successfully

It's not satisfied.

CA Rashmi Gandhi (Chartered Accountant) (86250 Points)
Replied 09 March 2024

I m doing tax audit , so sir definately I was confirmed about the transaction. Also just check the law, it itself said that f&o income is under business and one can choose any business under Sec 44AD.

CA Rashmi Gandhi (Chartered Accountant) (86250 Points)
Replied 09 March 2024

Originally posted by : Santhosh Devulapally
	Ok. There is a mixed opinion about both 44ada and 44ad. Some ppl say we can use both and some say we cant use both at the same time. Which one is correct? Can you clarify on this. Thank you

Sir,

Please read the article given under below link , ach and everything will be sorted out..

https://cleartax.in/s/fo-trader-return-filing

RAJA P M ("Do the Right Thing...!!!") (127177 Points)
Replied 09 March 2024

Originally posted by : CA Rashmi Gandhi

I m doing tax audit ,

so sir definately I was confirmed about the transaction. - YEAH, AS YOU SAID YOU ARE FILED 20-25 RETURNS U/S 44AD. BUT, TAX AUDIT. I'M NOT RECOMMEND FOR 44AD EVEN IF YOU ARE FILED. BCOZ, IT'S NOT ENDED IN YOUR END

Also just check the law, it itself said that f&o income is under business - YES , F&O INCOME IS UNDER BUSINESS INCOME.

and one can choose any business under Sec 44AD. - BUT, IT'S NOT UNDER SEC 44AD. NOWHERE SAID IT.

Madam,

Still the F&O income can't comes under the purview of sec 44AD

Nikhil Kaushik (Fellow CA) (85103 Points)
Replied 10 March 2024

see once you are covered under 44ADA, it automatically means that you are a person who is carrying out a profession covered under 44AA(1). Once that is true, you are disallowed to use 44AD by virtue of 44AD(6):

"......

(6) The provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to—

(i) a person carrying on profession as referred to in sub-section (1) of section 44AA;...."

It does not matter whether a tax return has been successfully filed and accepted. A lot of illegalities/incorrect interpretations get passed over in e-processing. Once a case is picked up for assessment, thats where these interpretations get tested.

On the issue of whether F&O income can be offered under presumptive taxation, absolutely yes. There is no bar on it

1 Like