TaxTMI 
TaxTMI 
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.
is tax audit mandatory while opting out of 44AD.
30 Jun 2026 
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Presumptive taxation opt-out under section 44AD can trigger books and tax audit requirements for a partnership firm.
A partnership firm that has used section 44AD for the first three years and then opts out from the fourth year becomes subject to the withdrawal consequences in section 44AD(4). The firm must maintain books of account under section 44AA and, where section 44AD(5) applies, get its accounts audited under section 44AB. For a partnership firm, any taxable income triggers this compliance requirement, so audit can be mandatory even where turnover is below the ordinary audit threshold. (AI Summary)
A partnership firm that has used section 44AD for the first three years and then opts out from the fourth year becomes subject to the withdrawal consequences in section 44AD(4). The firm must maintain books of account under section 44AA and, where section 44AD(5) applies, get its accounts audited under section 44AB. For a partnership firm, any taxable income triggers this compliance requirement, so audit can be mandatory even where turnover is below the ordinary audit threshold. (AI Summary)