In the last year's budget, govt of India amended the section 44AD.
This current post covers the revised tax positions based on the section 44AD as it stands post amendments:
Key changes are as under:
1. The turnover limit under 44AD now stands at Rs 2 CR
2. Once you choose an option ie declaring profit in excess of 8% of declaring profit less than 8% and going for audit, such an option has to be uniformly applied for next 5 assessment years too.
At present the applicability of maintenance of books of accounts and audit is as under:
1. Your turnover is in excess of Rs 2 cr - audit abd maintenance of books is compulsory irrespective of profit or loss.
2. Your turnover is less than 2 cr but you either earn profit is equivalent or in excess of 8% of turnover or even if your profit is less than 8% of turnover but you decide to declare profit equivalent or in excess of 8% of turnover - No audit is applicable
3. Your turnover is less than 2cr but you earn profit less than 8% of the turnover and do not want to declare higher profit and your TOTAL INCOME is LESS than EXEMPTED LIMIT- You need not maintain books of accounts. No Need to get the books audited.
4. Your turnover is less than 2cr but you earn profit less than 8% of the turnover and do not want to declare higher profit and your TOTAL INCOME is MORE than EXEMPTED LIMIT- You have to maintain books of accounts and get the books audited.
The above should cover all possible scenarios.
For clarification, Total Income is Income before deductions like 80C deductions.
Books of Accounts should include:
1. Documentation including contract notes, margin statements etc
2. Ledger including margin accounts, accounting representation of buy and sell transactions, bank statement, other accounts as may be applicable to specific cases like loan account, interest paid, etc etc
3. Profit & Loss Account, Balancesheet, Trail Balance.
Please note that different CAs and lawyers can have a different opinion on questions of law. Whatever opinion you may agree to, please ensure that you have verified your position to the extent possible.