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Question ID : 42184

TAX AUDIT IN COMPLIANCE OF SECTION 44AD

Assessee had opted Section 44AD and was filing his return of income as per section 44AD for AY2017-18, 2018-19, 2019-20. In AY2020-21 assessee filed his return of income as per normal provisions and got his accounts audited as his net profit was Less than 8%. Now in AY2021-22, Assessee's Net Profit is more than 8% and turnover 17 Lakhs. As per Sec 44AD(4):- Where an eligible assessee declares profit for any previous year in accordance with the provisions of this section and he declares profit for any of the five assessment years relevant to the previous year succeeding such previous year not in accordance with the provisions of sub-section (1), he shall not be eligible to claim the benefit of the provisions of this section for five assessment years subsequent to the assessment year relevant to the previous year in which the profit has not been declared in accordance with the provisions of sub-section (1). As Per Sec44AD(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee to whom the provisions of sub-section (4) are applicable and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB. My Question is : Can Assessee File his Return of Income as per Normal Provisions and does not get accounts audited. or Is Audit Mandatory for 5 Succedding Years even if Turnover is Less than 1 crore and assessee declares net profit more than 8%. Thanks & Regards

Posted by CA MOHIT SHARMA on Nov 29, 2021

Filed Under DIRECT TAXES

Answer ID : 81371

Audit not required. File normal ITR 3 along with financial statements.

Posted by VINAY BHARGAV KUMAR G on Nov 29, 2021