Is 44AD mandatory or optional?

As per the provisions of section 44AD, an assessee who adopts the provisions of section 44AD, is not required to maintain books of account as per section 44AA. However, the relief is available only in respect of business covered by the provisions of section 44AD and not in respect of any other business.

Can we opt out of 44AD?

What are the consequences if a person opts out of presumptive taxation scheme under Section 44AD? If one opts for presumptive scheme, they will have to continue for 5 years and if they want to opt out, they will be barred from resuming presumptive for a period of 5 years.

Who is eligible for presumptive income?

Any business which has a turnover of less than Rs 2 crore can opt to be taxed presumptively. They must declare profits of 8% for non-digital transactions or 6% for digital transactions, whichever one is applicable.

Which income comes under 44AD?

What is presumptive income under section 44AD? Section 44AD was introduced to give relief to the small taxpayers from maintaining books of accounts who have turnover less than Rs 2 crores ( amended to 5 crores subject to minimum criteria of digital transaction in budget 2020).

Is audit compulsory if profit less than 8?

IMPORTANT POINT : Thus, now the general requirement for books of account and audit in each and every case where the net profit is lower than 8% / 6% (total income above basic exemption limit) is no more.

Who can opt presumptive income?

Is 44ADA compulsory for 5 years?

As far as I know there is no such restriction for 44ADA. It is applicable only to 44AD because Sec 44AD(4) clearly specifies that if any person opts out of 44AD in any year then he can’t claim 44AD benefit for subsequent 5 years. There is no such Clause in 44ADA.

Can a person claim both 44AD and 44ADA?

As concluded above, a registered professional under Section 44AA, filing ITR under Section 44ADA is not eligible to avail benefits under Section 44AD.

Is Section 44AD applicable to professionals?

Applicability of Section 44ADA for Professionals The provisions of section 44AD are only applicable in case the assessee is carrying on any business. In a case where the assessee is carrying on a profession, the provisions of section 44ADA will come into force.

Can a person opt for SEC 44AD if he has commission income?

As per the provisions of Sec 44AD (6), a person cannot opt for Sec 44AD, if he is having commission income. He has not opted out of Sec 44AD on his own, rather he was not eligible by the operation of law. Hence he can opt for Sec 44AD in the F.Y. 2021-22.

Does Section 44AD apply to NRI’s?

As Section 44AD specifically mentions the word business, therefore section cannot be applied in case of professionals. Section 44AD only applies in case of Individuals, Partnership & HUF provided they are Resident in India. NRI’s cannot claim the benefit of this scheme.