44AD Audit Applicability

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This discussion clarifies the applicability of a tax audit for a proprietor whose turnover is below Rs 2 crore and profit is below the taxable threshold. Even if the proprietor declared income under Section 44AD in the preceding assessment year, a tax audit is not applicable if the current year's profit remains below the basic exemption limit.

CA Pooja P

CA Pooja P (Querist)

30 October 2022 The assessee is a proprietor.
For A.Y. 2022-23, his turnover is Rs. 1,84,00,000 (below Rs.2Cr), profit is Rs.1,50,000 ( below 6% of turnover) and total income is below basic exemption limit.

Is audit applicable ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 October 2022 Whether he had declared income u/s. 44AD of IT act, in preceding ass. year?

CA Pooja P

CA Pooja P (Querist)

30 October 2022 Yes. He had declared income u/s.44AD in A.Y. 21-22.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

31 October 2022 Tax audit not applicable as profit is below taxable income.

CA Pooja P

CA Pooja P (Querist)

31 October 2022 Ok thank you.
In addition would also like to ask, what if in the same scenario, the assessee was audited in the prev year that is A.Y. 21-22.

Still audit would not be applicable ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

31 October 2022 Still audit would not be applicable in view of income below taxable limit.

CA Pooja P

CA Pooja P (Querist)

31 October 2022 Ok. Thank you so much Sir.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

31 October 2022 You are welcome..........

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