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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 June 2012 dear sir,
1)if one have turnover of rs 25 lac by wholesale proprietary business and net profit is rs.155000, is it compulsory for him to audit u/s 44ad?
2)if person is adopting 44ad, so is he liable for payment of advance tax?
3)if one have turnover of rs 35 lac and net profit is rs. 2 lac and 80 c deduction is rs 35000, is it compulsory for him to audit u/s 44ad?
thanks in advance.

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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03 June 2012 1. Yes. But better you show your income at
8% as net profit and avoid tax audit.
.
2. No
.
3. Show 8% net profit on Rs.35 lacs and out of that amount deduct Rs.35,000 u/s 80C. On Remaining amount pay tax and thus you can avoid audit u/s 44AD.
.
(Accepted your thanks in advance - humour).
.

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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04 June 2012 Sub section 5 of Section 44AD provides that audit is required if the assessee claims profits lower than 8% AND his income exceeds the exemption limit.

So, if an assessee claims profits lower than 8% but his income does not exceed the exemption limit, he is NOT required to get his accounts audited.

So, the answers to your queries are as under:

1. If the assessee shows income of Rs. 1,55,000 he is NOT required to get his accounts audited. The reason being that his income is less than the exemption limit.

2. Provisions of advance tax are NOT applicable to an assesee covered u/s 44AD.

3. Since the total income is less than the exemption limit, the assessee is NOT required to get his accounts audited.

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