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Switching from 44AD to normal after 3 years

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Rahul

individual

38 Points Posted on 10 July 2020

Hi,

I am filling my return under section 44Ad from last 3 years , so can I now switch to normal or do I have to use 44AD for 5 years.

A local accountant in my area told me that i have to be in 44AD for 5years and if i switch in between then i will have to file the returns of last 3 years again , so is this correct ?

Thanks

Replies (2)

Quick Summary

This discussion addresses the rules around switching from presumptive taxation under Section 44AD to normal tax filing. The user has been filing under 44AD for three years and seeks clarification on whether they can switch to normal provisions in the fourth year. The advice provided suggests that while a switch is possible in the fourth year, one must continue with 44AD for five consecutive years from the initial opt-in year. Switching before the five-year period may necessitate refiling previous returns and potentially require a tax audit.

CA. Umesh kumar

ca.umesh11@gmail.com

963 Points Posted on 10 July 2020

You can switch to file ITR under normal provision in 4th year but for 5 years you can not file under section 44AD (to be counted from the first year in which you opted for 44AD). Therefore you have to file under normal provision in 5th year also.