• Section 44ada and 44aa

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?
Asked 12 months ago in Income Tax from New Delhi, Delhi
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
Lalit Bansal
CA, Delhi
559 Answers
37 Consultations

5.0 on 5.0

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.
Lalit Bansal
CA, Delhi
559 Answers
37 Consultations

5.0 on 5.0

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
Abhishek Dugar
CA, Mumbai
3578 Answers
161 Consultations

5.0 on 5.0

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.
Lakshita Bhandari
CA, Mumbai
2177 Answers
71 Consultations

5.0 on 5.0

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
Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
23 Consultations

5.0 on 5.0

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
Rohit R Sharma
CA, Mumbai
2104 Answers
91 Consultations

5.0 on 5.0

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