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Whether application of 44AD is mandatory or Optional?

Others 453 views 5 replies
Going by the language used in section 44AD(1), it appears that it is a mandatory provision. Assessee does not have any option to choose between 44AD and normal provision.

Further, it also appears that even in case of an eligible assessee having eligible business and having turnover between 1 to 2 crores, he has to mandatorily declare profit of 8% or 6 %.
Replies (5)
Need not be 8% or 6% , you may declare higher profits to avoid tax audit
Its a mandatory provision
for individual huf and firms its assumed that their business income is 8% of the turnover or higher amount as may be declared

if its claimed otherwise then he has to substantiate it with verifying his accounts by an auditor
If all transactions are through online modes then upto 10 Crores tax audit is not required if you declare 8%
You have to compulsorily follow 44AD if your turnover is below 2 crores and you don't want to get your accounts audited
By default 44AD is applicable for non audit cases


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