• Section 44AD of Income Tax Act (Presumptive Tax Scheme)

Sir, I have a business for which I opted for presumptive tax scheme under Section 44AD for three years (FY 2016-17, 2017-18, 2018-19). However for the year 2019-20, I missed the deadline to file tax return. Now I am unable to file tax return for 2019-20. Does this mean the chain of atleast 5 continuous years requirement in Section 44AD got broken ? Can I still take the scheme in 2021 ? What will be the consequences since I missed the deadline for 2019-20 tax return ? I want to still continue to take the scheme since I fulfill all other conditions of the scheme. Can I go back and still file the tax return for 19-20 taking the scheme so that the chain is not broken ? Please advise.
Asked 1 year ago in Income Tax

Yes you can take the benefit of 4AD. The chain is not broken. But you cant file the return for 19-20 as time for filling the same has been expired 

Vidya Jain
CA, Kolkata
974 Answers
57 Consultations

4.8 on 5.0

Yes whenever notice is issued, then only you can file your return and then you will be liable to pay taxes and penalty

Vidya Jain
CA, Kolkata
974 Answers
57 Consultations

4.8 on 5.0

- For AY 2020-21, last date was extended till 31.05.2021. File condonation application with the department for filing of ITR for AY 2020-21. You can still take the benefit u/s 44AD.

Vivek Kumar Arora
CA, Delhi
4476 Answers
606 Consultations

5.0 on 5.0

Dear Sir,


Hope you are doing well !!


Yes, you can take the benefit of section 44AD.


However, You can't file return for FY 2019-20. The due date has been lapsed.


You can file the return only after receiving approval from commissioner. You need to file condonation of delay for the same,


Also, If you receive any notice from the income tax department then you can file the return.


We may help you in filing condonation of delay request.

Payal Chhajed
CA, Mumbai
5170 Answers
236 Consultations

5.0 on 5.0



Yes you can take benefit of section 44ad.

No can't file return for 2019- 20. 

Karishma Chhajer
CA, Jodhpur
2444 Answers
29 Consultations

5.0 on 5.0

Hello Sir/Madam 


You can still avail benefit of 44AD because non filling of ITR doesn’t means u had changed your method of filling ITR 


If your 19-20 ITR having income more then exemption limit then in my views plz prepare a computation of income and pay tax if any payable 



Lalit Bansal
CA, Delhi
756 Answers
59 Consultations

5.0 on 5.0

Yes you can still take as it is mentioned in the section that

 "[4] Where an eligible assessee declares profit for any previous year in accordance with the provisions of this section and he declares profit for any of the five assessment years relevant to the previous year succeeding such previous year not in accordance with the provisions of sub-section [1], he shall not be eligible to claim the benefit of the provisions of this section for five assessment years subsequent to the assessment year"


Since you haven't shown any income you are still eligible for presumptive.


Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
4053 Answers
67 Consultations

5.0 on 5.0

Non filing of return in case you do not have any taxable income has no serious consequence. You may not be able to file the return for the fy 2019-20 now, as you missed the deadline. However, in case your income exceeds taxable limits and you have tax liability, I suggest you pay tax and be done with it. In case, there is any notice from the IT Department, the payment of tax helps you to avoid interest and penalties.  Further, compute the income under 44AD(4) only, following the presumptive taxation as hitherto. 

It won't affect your ability to claim the benefit of 44AD, even if you have not filed the return for the FY 2019-20.

B Vijaya Kumar
CA, Hyderabad
962 Answers
121 Consultations

5.0 on 5.0

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