Sec.44AD and audit U/s 44AB

[HIMANSHU JARIWALA]

Dear All

Please calrify following issue

Mr. A is Manufacturer or trader or any bussiness other then plying of goods vehical . His T.O for the Year ended 31/03/2011 comes to Rs.45 Lacs. Only because his T.O. is bellow Rs. 60 Lacs Section 44AD is applicable? If  his net profit is below 8% of his T.O. of Rs. 45 Lacs, he required to get his accouts audited by CA? Is Section 44AD is optional or mendatory?

Please reply.

regards

[CA Rachit Agarwal]

1. 44AD is optional only in case where the audit is carried out by CA. It is mandatory if the assessee TO less than Rs. 60 lacs and assessee do no wish to get his accounts audited.

AI Summary

Presumptive taxation under section 44AD is optional when a taxpayer opts for audit; otherwise it governs audit obligation. The adviser explains that the 44AD presumptive scheme is optional only where the taxpayer elects to have their accounts audited by a chartered accountant; if a taxpayer with turnover below the statutory threshold does not opt for audit, the presumptive regime effectively operates as the mandatory compliance route and the taxpayer would not seek a regular audit.