Hi These question are about my defective ITR3. We used 44ADA in ITR3 and it got defective. Error code 181. We wanted ITR4 for 44ADA, but had to go with ITR3 because of capital gain. _________________________________ Question 1: Do 44AA and 44ADA apply in parallel under certain circumstances and conditions? Question 2: If answer to question 1 is YES, what are these circumstances and conditions? Question 3: If answer to question 1 is YES, then for professionals who are eligible for 44ADA, if professional income is declared under 44ADA in ITR3, then detailed BS and PL have to be filled in ITR3?
Hii
1. No 44AA and 44ADA cant apply simultaneously, either one is applicable.
2. NA
3. As per income tax act following profession covered under section 44ADA as professionals
1 Legal
2 Medical
3 Engineering
4 Architectural Profession
5 profession of Accountancy
6 Technical Consultancy
7 Interior Decoration
Thanks, but, the answer to my Question 1 could be YES. Here is a passage from google concerning what I'm saying. Article is by a CA. He has pointed out a (possible) conflict, but he has not given any solution that I could understand. [Quote] "Further a corresponding mandate is also provided in section 44AA i.e. section dealing with maintenance of books of account. However, a corresponding mandate in section 44AA with regard to the section 44ADA is missing thus creating a chaos. The section 44ADA overrides only section 28 to 43C thus making it mandatory for the professionals covered under section 44ADA to maintain books of accounts though they have opted for presumptive taxation scheme." [/Endquote] 44ADA overrides only section 28 - 43C. Is the practical solution what I wrote in my Question 3 previously? Or should one ignore 44ADA altogether while filling ITR3, even if he is eligible and even if his income is more than 50% of business turnover? Thank you very much in advance.
if you are eligible for 44ADA and not opt the same then department may ask you to produce complete books of accounts but if you opt then department cant ask complete books of accounts they can ask for details of receipts to ensure your total receipts from such profession does not exceed 50 lakhs further its depends on nature of your business profession for maintaining of records such as in the case of Doctors, they have to maintain OPD registers, medicine register etc.
Hi,
I am not going into the technical aspect section 44ADA and 44AA.
Because, the purpose of introducing section 44ADA was to give releif to small professionals from maintaining books of accounts.
Accordingly, in my view you can take benefit of section 44ADA and no need to maintain books of accounts.
Please feel free to call revert in case you need more clarity
Thanks and regards
Abhishek Dugar
CA CS B.Com
If you are eligible to claim presumptive taxation scheme under section 44ADA and claiming the same as 50% profits, you need not maintain books of accounts and fill up balance sheet and profit & loss while return filing.
But, if you show profits less than 50%, then maintaining books of accounts and getting them audited would be required.
Hi,
Yes, there is a possibility that section 44AA and section 44ADA can apply simultaneously. In other words, though the law allows you to declare a profit of 50%, it also mandates you to maintain books of accounts. However, a harmonious construction of the two would be to declare 50% profit as well as maintain books of accounts, though you do not calculate profit as per the books of accounts.
This could occur if your turnover is above Rs. 10 lakhs (thus, triggering section 44AA) but it less than Rs. 50 lakhs (thus, allowing benefit of section 44ADA).
There is an anomaly in the forms prescribed by the CBDT. You do have an option to approach your Assessing Officer to claim the benefit of section 44ADA.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
Hello,
As per IT Act, 44AA & 44ADA can go hand in hand. Whether your professional ethics allow you to do so is a question.
If you want to claim only presumptive income then better file ITR-4 rather than ITR-3, that ways you can avoid filing balance sheet.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
