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Tax audit under presumptive taxation u/s 44ad

Manish Negi (Expert) (394 Points)

03 September 2013

Dear Professionals,

I have a query regarding applicability of tax audit under presumptive taxation (Section 44AD).

One of my client is a businessman engaged in retail sales having a turnover of Rs. 80 Lacs & my profit from business is Rs. 2.60 Lacs. Please guide me whether he is liable for tax audit u/s 44AB.

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3 Replies

Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 03 September 2013

As your turnover is less than rs 1crore, u can opt for presumptive taxation under sec 44AD. so u can offer 8% of ur turnover i.e 6,40,000 or actual net profit of rs 2,60,000,.but when u offer 2,60,000 and if ur liable to pay any tax.u are liable to tax audit under sec44AB i.e if u offer less than 8% of ur gross turnover as business income and if such offered income exceeds maximum amount not chargeable to rax,u r liable to tax audit under sec 44AB