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Section 44 ad

RAFEEQUE PATHAN (ARTICLE) (47 Points)

06 October 2014

Can there be tax audits for presumptive income u/s 44 Ad for company assessee?

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12 Replies

Jaikishan (CA) (168 Points)
Replied 06 October 2014

Audit of accounts is compulsory
- In case of Business: – If Total Sales/ Gross Turnover exceeds Rs 1 Crore in any previous Year
- In case of Profession: – If Gross Receipts exceeds Rs 25 Lakh in any previous Year
- Assessees covered u/s 44AD/44AF/44BB/44BBB are also required to audit of accounts if they claim that their profit will be less than limit specified in respective section. e.g. u/s 44 AD Audit of accounts is required when two conditions are satisfied:-
  1. Claim lower profit than limit specified u/s 44AD (Limit of 8%)
  2. Total Income exceed basic exemption limit.

RAFEEQUE PATHAN (ARTICLE) (47 Points)
Replied 06 October 2014

Company aseesee too?

Shivam Gharat (Company Secretary) (84 Points)
Replied 07 October 2014

sec.44 AD applies to Individual,HUF and firm other than LLP

Jaikishan (CA) (168 Points)
Replied 07 October 2014

Agreed with shivam also all the individual and HUF must be resident.

kanh singh (CA Article) (121 Points)
Replied 07 October 2014

Any assessee (Individual, HUF, Partnership firm) who declares presumptive income u/s 44 AD should not require to get audited his books of accounts.

Tax audit covered u/s 44AB and i think Mr. Jaikishan is talking about clause d of section 44AB, where turnover of assessee is less than 1 crore and declares profit of less than 8% of turnover.

Please explain if i am wrong.

saranraj thangaraj (articled assistent) (121 Points)
Replied 07 October 2014

No rafeeque pathan.... need not to audit u/s 44AD

saranraj thangaraj (articled assistent) (121 Points)
Replied 07 October 2014

No rafeeque pathan.... need not to audit u/s 44AD

RAFEEQUE PATHAN (ARTICLE) (47 Points)
Replied 07 October 2014

Clear with my query. Thanks you all sirji.

Santhosh Poojary (SIEMPRE AHÍ PARA TI) (15607 Points)
Replied 07 October 2014

Following are the assessees not covered u/s44AD....

1) Individual who is not resident, 2)HUF who is not Resident 3) Association of Person

4) Firm having non resident Status.5) A local Authority.6) A co-operative Society

7)Limited Liability Partnership both Indian as well as Foreign.8) Companies both Domestic and Foreign comapny.9) Every Artificial Juridical Person.

So in your case being company assessee Need not to Audit u/s 44AD.

*RENU SINGH * (✩ §m!ℓ!ñġ €ม€§ fℓม!ñġ ђ♪gђ✩ ) (21627 Points)
Replied 07 October 2014

Section 44AD applies to Individuals,HUFs,partnership firms (excluding LLP) .

It's nt applicable to assesssee who is availing deduction u/s 10AA or chapter VIA

The scheme is applicable to any Business excluding 44AE (for heavy vehicle business) where turnover/receipts not exceeds 1 crore.

presumptive rate of Income = 8% such gross turnover or receipts

Need not to pay Adv tax and not needed to maintain books of accounts.

But if turnover exceeds the limit of 1 crore, then asessee need to maintains books of account and also need to be audited.

RAFEEQUE PATHAN (ARTICLE) (47 Points)
Replied 07 October 2014

Thanks santhosh sir for detailed explanation.

Jaikishan (CA) (168 Points)
Replied 08 October 2014

I was talking about 44AB linked with 44AD as I interpreted in that way, however I didn't notice the word company that time and later on when other person told that 44AD is not applicable to companies, that time i realised about the same and agreed with the concerned person.

henceforth the answer given by the other people above are in confirmity with the same.