Tax payer can file return under section 44AD, however he cannot loop out of 44AD for 5 years.
If 44Ad is not applicable then he cannot opt for 44Ad for next years.
I have a doubt regarding this.
One person was filing return under section 44AD, however last year his turnover was more than 2 crore, and he filed return after tax audit under section 44AB.
Now this year his turnover is less than 2 crore, so question is can he opt for 44AD?
This is interesting question.
Whether a person can re-enter 44AD after exit due to turnover more than 2 crore.
Here we need to go through section 44AD(1) of Income Tax Act, as per this 44AD is applicable on eligible business and eligible business specifically says business with turnover less than 2 crores.
Since last year he had sales more than 2 crore, so 44AD was not applicable. So he did not opt out of 44AD on his will but due to his business no more an eligible business.
So he has not broken cycle as specified in 44AD(4). He can file return under section 44AD for current AY.
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