Section 44 AB of Income Tax Act ( After Amendment by Finance Act 2016)

By | November 25, 2016
(Last Updated On: November 25, 2016)

Section 44 AB of Income Tax Act

[Section 44AB After Amedment by the Finance Act, 2016 ]

69[Audit of accounts of certain persons carrying on business or profession.

44AB. Every person,—

(a)carrying on business shall if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds 73[one crore rupees] in any previous year 74[***]; or
(b)carrying on profession shall, if his gross receipts in profession exceed 75[75a[twenty-five] lakh rupees] in any 76[previous year; or
(c)carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under 77[section 44AE] 78[or section 44BB or section 44BBB], as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any 79[previous year; or]] 80[***]
81[(d)carrying on the 81a[business]shall, if the profits and gains from the 81a[business]are deemed to be the profits and gains of such person under 81b[section 44AD] and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his 81a[business]and his income exceeds the maximum amount which is not chargeable to income-tax in any 81c[previous year,]]
The following clause (e) shall be inserted after clause (d) of section 44AB by the Finance Act, 2016, w.e.f. 1-4-2017 :
(e)carrying on the business shall, if the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,

get his accounts of such previous year 82[***] audited by an accountant before the specified date and 84[furnish by] that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed :

85[Provided that this section shall not apply to the person, who derives income of the nature referred to in 86[***] section 44B or 87[section 44BBA], on and from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later :

Provided further that] in a case where such person is required by or under any other law to get his accounts audited 88[***], it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date88a and 89[furnishes by] that date the report of the audit as required under such other law and a further report 90[by an accountant] in the form prescribed under this section.

Explanation.—For the purposes of this section,—

(i)“accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288;
91[(ii)“specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means 92[the due date for furnishing the return of income under sub-section (1) of section 139].]]

69. Inserted by the Finance Act, 1984, w.e.f. 1-4-1985.
73. Substituted for “sixty lakh rupees” by the Finance Act, 2012, w.e.f. 1-4-2013. Earlier “sixty lakh rupees” was substituted for “forty lakh rupees” by the Finance Act, 2010, w.e.f. 1-4-2011.
74. Words “or years relevant to the assessment year commencing on the first day of April, 1985, or any subsequent assessment year” omitted by the Finance Act, 1988, w.e.f. 1-4-1989.
75. Substituted for “fifteen lakh rupees” by the Finance Act, 2012, w.e.f. 1-4-2013. Earlier “fifteen lakh rupees” was substituted for “ten lakh rupees” by the Finance Act, 2010, w.e.f. 1-4-2011.
75a. Word “fifty” shall be substituted for “twenty-five” by the Finance Act, 2016, w.e.f. 1-4-2017.

76. Substituted for “previous year,” by the Finance Act, 1997, w.e.f. 1-4-1998.

77. Substituted for “section 44AD or section 44AE or section 44AF” by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2011.
78. Inserted by the Finance Act, 2003, w.e.f. 1-4-2004.
79. Substituted for “previous year,” by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2011.
80. Words “or years relevant to the assessment year commencing on the first day of April, 1985, or any subsequent assessment year,” omitted by the Finance Act, 1988, w.e.f. 1-4-1989.
81. Inserted by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2011.
81a. Word “profession” shall be substituted for “business” by the Finance Act, 2016, w.e.f. 1-4-2017.
81a. Word “profession” shall be substituted for “business” by the Finance Act, 2016, w.e.f. 1-4-2017.
81b. Words “section 44ADA” shall be substituted for “section 44AD” by the Finance Act, 2016, w.e.f. 1-4-2017.
81c. Words “previous year; or” shall be substituted for “previous year,” by the Finance Act, 2016, w.e.f. 1-4-2017.
82. Words “or years” omitted by the Finance Act, 1988, w.e.f. 1-4-1989.
84. Substituted for “obtain before” by the Finance Act, 1995, w.e.f. 1-7-1995.
85. Substituted for “Provided that” by the Finance Act, 1992, w.r.e.f. 1-4-1985.
86. Words “section 44AC or” omitted by the Finance Act, 1995, w.e.f. 1-7-1995.
87. Substituted for “section 44BB or section 44BBA or section 44BBB” by the Finance Act, 2003, w.e.f. 1-4-2004.
88. Words “by an accountant” omitted by the Finance Act, 1985, w.e.f. 1-4-1985.
88a Words “by an accountant” omitted by the Finance Act, 1985, w.e.f. 1-4-1985.
89. Substituted for “obtains before” by the Finance Act, 1995, w.e.f. 1-7-1995.
90. Inserted by the Finance Act, 2001, w.e.f. 1-4-2001.

91. Substituted by the Finance Act, 2001, w.e.f. 1-4-2001. Prior to its substitution, clause (ii), as substituted by the Finance Act, 1988, w.e.f. 1-4-1989 and later on amended by the Finance Act, 1994, w.e.f. 1-4-1994, read as under :

‘(ii)“specified date”, in relation to the accounts of the previous year relevant to an assessment year means,—
(a)where the assessee is a company, the 30th day of November of the assessment year;
(b)in any other case, the 31st day of October of the assessment year.’

92. Substituted for “the 30th day of September of the assessment year” by the Finance Act, 2012, w.e.f. 1-4-2012. Earlier the words “30th day of September” were substituted for “31st day of October” by the Finance Act, 2008, w.e.f. 1-4-2008.

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