is tax audit mandatory while opting out of 44AD.

[Manoj Yadav]

A partnership firm has opted for 44ad for first 3years of its incorporation while filing its itr. its turnover has never crossed 1 crore in any year. for 4th year onward it wants to opt out of 44AD. its turnover during the 4th year is 54 lacs. is audit mandatory under 44AD(4)/44AB or it can file its itr with books of account without audit.

AI Summary

Presumptive taxation exit and tax audit obligation when a firm opts out of section 44AD Whether a partnership firm that has used the presumptive taxation scheme under section 44AD for the first three years of incorporation, with turnover never exceeding the prescribed threshold, may opt out of the scheme in the fourth year when turnover remains below the limit, and file its return on the basis of books of account without a tax audit, or whether audit requirements under section 44AD(4) and section 44AB become mandatory on opting out. The issue concerns the interaction between continued eligibility under the presumptive regime, withdrawal from that regime, and the consequent audit obligation for a business with turnover of 54 lakhs in the fourth year.