Section 44AD of Income Tax Act "Audit of accounts of certain persons carrying on business or profession"
44AD. (1) Notwithstanding anything to the contrary
contained in sections 28 to 43C, in the case of an eligible
assessee engaged in an eligible business, a sum equal to
eight per cent of the total turnover or gross receipts of
the assessee in the previous year on account of such
business or, as the case may be, a sum higher than the
aforesaid sum claimed to have been earned by the eligible
assessee, shall be deemed to be the profits and gains of
such business chargeable to tax under the head "Profits and
gains of business or profession" :
Provided that this sub-section shall have effect as if for
the words "eight per cent", the words "six per cent" had
been substituted, in respect of the amount of total turnover
or gross receipts which is received by an account payee
cheque or an account payee bank draft or use of electronic
clearing system through a bank account 92[or through such
other electronic mode as may be prescribed] during the
previous year or before the due date specified in
sub-section (1) of section 139 in respect of that previous
year.
(2) Any deduction allowable under the provisions of sections
30 to 38 shall, for the purposes of sub-section (1), be
deemed to have been already given full effect to and no
further deduction under those sections shall be allowed.
(3) The written down value of any asset of an eligible
business shall be deemed to have been calculated as if the
eligible assessee had claimed and had been actually allowed
the deduction in respect of the depreciation for each of the
relevant assessment years.
(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 relevant
to the previous year in which the profit has not been
declared in accordance with the provisions of sub-section
(1).
(5) Notwithstanding anything contained in the foregoing
provisions of this section, an eligible assessee to whom the
provisions of sub-section (4) are applicable and whose total
income exceeds the maximum amount which is not chargeable to
income-tax, shall be required to keep and maintain such
books of account and other documents as required under
sub-section (2) of section 44AA and get them audited and
furnish a report of such audit as required under section
44AB.
(6) The provisions of this section, notwithstanding anything
contained in the foregoing provisions, shall not apply to-
(i) a person carrying on profession as referred to in
sub-section (1) of section 44AA;
(ii) a person earning income in the nature of commission or
brokerage; or
(iii) a person carrying on any agency business.
Explanation.-For the purposes of this section,-
(a) "eligible assessee" means,-
(i) an individual, Hindu undivided family or a partnership
firm, who is a resident, but not a limited liability
partnership firm as defined under clause (n) of sub-section
(1) of section 2 of the Limited Liability Partnership Act,
2008 (6 of 2009); and
(ii) who has not claimed deduction under any of the sections
10A, 10AA, 10B, 10BA or deduction under any provisions of
Chapter VIA under the heading "C. - Deductions in respect of
certain in-comes" in the relevant assessment year;
(b) "eligible business" means,-
(i) any business except the business of plying, hiring or
leasing goods carriages referred to in section 44AE; and
(ii) whose total turnover or gross receipts in the previous
year does not exceed an amount of two crore rupees.