sec 44ad and sec 44ab inter change

[giri gattupalli]

respected sir,

one of my client filed ITR S for ay 2023-24,2024-25, 2025-26 under SEC 44AB .(audited). now for AY 2026-27 his gross receipts are well below one crore. i want to file the itr for ay 2026-27 under SEC 44AD. please tell me is there any future consequences, if turnover for next year exceeds two crores and again need to file under Sec 44AB.

and as the new income tax act is coming in to force from ay 2027-28, the next year, what would be the consequences.

thanking you

AI Summary

Presumptive taxation eligibility permits transition from tax audit, while turnover-based statutory exit remains distinct from voluntary withdrawal restrictions.
Section 44AD may be adopted where its eligibility conditions and turnover threshold are satisfied, notwithstanding tax audits in earlier years. Section 44AD eligibility and section 44AB audit liability are separate tests. If later turnover exceeds the presumptive-tax threshold, normal computation and audit may apply without that statutory exit itself attracting the five-year restriction. The restriction may apply where an otherwise eligible assessee declares profit below presumptive income. The corresponding provision under the Income-tax Act, 2025 retains this restriction.