Income Tax Section 44AD Assistance Excel Tool

INTRODUCTION :

The Section 44AD of the Income Tax Act, 1961 is a presumptive business income section. This section is generally applicable in the cases of large number of tax payers. This section is thoroughly related with Section 44AA (liability for compulsory maintenance of books of accounts) and Section 44AB (liability for getting books of accounts audited).

The Section 44AD is on the statute since long. However, some significant amendments have been made in this section w.e.f. AY 2017-18. Two new sub sections i.e., sub section (4) and sub section (5) have been brought w.e.f. AY 2017-18. These are relating to requirement for declaration of business profit U/s. 44AD(1) continuously for 6 assessment years, ineligibility for Section 44AD due to non compliance with above 6 year’s restriction, liability for keeping and maintaining books of accounts U/s. 44AA and for getting books of accounts audited, on non compliance with above 6 years’ restriction etc.

Due to all these amendments, the provisions of Section 44AD and its interrelation with Section 44AA and Section 44AB have become very complicated. Therefore, for assisting the tax payers and tax professionals in determining the eligibility for Section 44AD (due to Sec. 44AD(4)) and liability for accounts U/s. 44AA (due to Sec. 44AD(5)) and liability for audit U/s. 44AB (due to Sec. 44AD(5), an excel sheet tool has been prepared by the author. The same is attached herewith and can be downloaded and used. The same is free for use by anyone. The same is not chargeable.

FUNCTIONING OF THE TOOL :

The tool is very simple. It ask the users to give responses to some questions by selecting the options given in the drop down menu. The cells in which the responses are required are green coloured cells. Based on the responses given by the user, the tool will give some results regarding eligibility of the user for Section 44AD, liability of the user regarding accounts and audit U/s. 44AA and 44AB etc. The tool will also try to give reasons behind the results given by it.

First MACRO will have to be enabled before starting use of the tool.

If the correct / full / proper response has not been given for all the questions, the tool may not give proper result. In case, the results given by the tool are not correct / proper, kindly recheck the responses given by you in the green coloured field. Please ensure that no green coloured cell is left blank / improperly responded.

The tool has been prepared on higher version of MS OFFICE / WINDOWS / EXCEL. Therefore, in lower versions, there may be some problem in its smooth functioning.

Presently the tool will work in relation to the Assessment Year 2017-18 to AY 2022-23. The updated versions for subsequent assessment years will be released later on.

DISCLAIMER : The tool has been prepared only with the intension to assist the users regarding Sec. 44AD, Sec. 44AA and Sec. 44AB. The same has been prepared by taking reasonable care. The same has been prepared on the basis of some assumption, presumptions and understanding of the author regarding above sections. Some of these assumptions etc. have been mentioned in the tool itself. The results declared by the above tool are only suggestive based on responses given by the user to the given questions. However, it is requested that the while taking any action on the basis of results given by the tool, the user may read the concerned provisions of the Income Tax Act, Income Tax Rules and other relevant legal material etc. The results given by the above tool are not professional advice. The author do not take any responsibility regarding any loss, damage etc. which may caused to the user due to any action taken on the basis of the attached tool.

FEED BACK / SUGGESTIONS :

This is the initial version of the tool. Kindly give feed back / suggestions for its further improvement on mobile no. 9827237841 / e mail id. – ca.sharadjain.ujjain@gmail.com