Eligible Assesse :
Resident Individual/Resident HUF/ Resident Firm (excluding LLP) who has not claimed deduction u/s 10AA or 80IA to 80RRB
Exceptions :
This section is applicable for any Business except
Sec. 44AE Business,
Agency Business,
Commission & Brokerage business; and Turnover/Gross Receipts is upto 2 crore.
Note:
Where the amounts received during the PY in cash does not exceed 5% of the total turnover
or gross receipts of such PY then limit of Turnover 3 crore apply instead of 2 crore
Calculation of Income Under this Section 44AD
1. If Turnover/ Gross Receipts realized by Account Payee Cheque/DD/ECS upto due date of Return of filing
Then PGBP = Turnover x 6%
2. If Turnover/ Gross Receipts not realized by Account Payee Cheque/DD/ECS upto due date of Return of filing
Then PGBP = Turnover x 8%
Specific Points :
1.If the assessee declares income as per Section 44AD or higher income and whose Turnover is up to 2Cr/3Cr then assessee is not required to maintain books of account & get it audited.
2.If assessee declares income for any P.Y as per 44AD & he doesn’t declare income as per 44AD in any of the five consecutive P.Y.s, then he shall not eligible to claim benefit of sec. 44AD for 5 years subsequent to the year in which assessee did not declare income as per Sec. 44AD
3.If above point is applicable & NTI of assessee is more than basic exemption then assessee is required to maintain books of accounts & get it audited.
List of Codes Not eligible for Section 44AD
Example
Let us consider the following particulars relating to an resident individual, Mr.A being an eligible assessee whose Turnover do not exceed 2 crore in any of the AY’s between A.Y. 24-25 to AY 26-27
In the above case Mr. A an eligible assessee, opts for presumptive taxation u/s 44AD for AY 24-25 & A.Y. 25-26, However, for A.Y. 26-27, he offers income of only 10 lakh on turnover of 2 crore, which amounts to 5% of his gross receipts. He has to maintains books of accounts u/s 44AA & gets the same audited u/s 44AB, Since he has not offered income is accordance with the provisions of Sec. 44AD, for five consecutive A.Y, after A.Y. 24-25, he will not be eligible to claim the benefit of Sec. 44AD for next five AY succeeding A.Y. 26-27 i.e. from A.Y. 27-28 to 31-32
