Answer

1. F

   Facts

   If you declare business profit lower than the presumptive rate and your income is above the basic exemption limit, the law expects books of account and a tax audit. Without them, the return can be marked defective.

2. P

   Provisions and law

   • Sec 139(9), Income-tax Act 1961 (now Sec 263(7), Income-tax Act 2025)The Assessing Officer can treat a return as defective, give 15 days (or more on request) to fix it, and treat it as invalid if not fixed.
   • Sec 44AD, Income-tax Act 1961 (now Sec 58, Income-tax Act 2025)Presumptive income of 8% of turnover, or 6% for digital receipts, for eligible small businesses.
   • Sec 44AB, Income-tax Act 1961 (now Sec 63, Income-tax Act 2025)Tax audit is needed when income is declared below the presumptive rate and exceeds the basic exemption limit.
3. A

   Analysis

   Say your turnover was ₹60 lakh, all digital, and you declared ₹2,40,000 profit (4%), with total income above the exemption limit. You have two routes. You can raise profit to at least 6% of ₹60 lakh, that is ₹3,60,000, in the corrected return, or get books audited and support the lower profit. Compare the extra tax under the first route with the audit cost and the risk of questions.

4. C

   Conclusion

   1. 1Work out the presumptive profit at 6% or 8% for your turnover.
   2. 2Decide between declaring the presumptive profit or getting an audit.
   3. 3If auditing, get the report uploaded first.
   4. 4Upload the corrected return with matching figures.

Choosing a lower profit later can also affect your use of presumptive taxation for the next five years.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.