Answer

1. F

   Facts

   A professional who does not use Sec 44ADA files ITR-3 with income computed from books. A tax audit applies if gross receipts exceed ₹50 lakh under Sec 44AB (now Sec 63).

2. P

   Provisions and law

   • Sec 44AA, Income-tax Act 1961 (now Sec 62, Income-tax Act 2025)Books of account must be kept by professionals and businesses above the income or turnover limits
   • Sec 44AB, Income-tax Act 1961 (now Sec 63, Income-tax Act 2025)Tax audit if business turnover exceeds ₹1 crore (₹10 crore if cash receipts and payments are each within 5%), or professional receipts exceed ₹50 lakh
   • Sec 37, Income-tax Act 1961 (now Sec 34, Income-tax Act 2025)Business expenses wholly and exclusively for the business are deductible
3. A

   Analysis

   Books let you claim actual expenses such as clinic rent, staff salary and equipment depreciation. Example: receipts ₹45 lakh with actual expenses of ₹28 lakh gives income of ₹17 lakh, lower than ₹22.5 lakh under the 50% presumptive rate. With receipts above ₹50 lakh, an audit is needed before filing.

4. C

   Conclusion

   1. 1Maintain the prescribed books
   2. 2Compute income from books
   3. 3Check the ₹50 lakh audit limit
   4. 4Get the audit done if needed
   5. 5File ITR-3

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