Applicability of tax audit in case of partnership firm
This query is : Resolved
Sumit Shaw
(Querist)
19 August 2018
Suppose my net profit is 50000 after deducting depreciation of 2% and my net profit ratio is 8%, now while filing of return I have claimed depreciation @10% and my taxable profit goes down to 30000 and my net profit ratio goes below 8%.
Please guide whether my approach is correct. Also please suggest whether there is need to book deferred tax and in this case am I liable to tax audit.
Please guide experts..
Please guide whether my approach is correct. Also please suggest whether there is need to book deferred tax and in this case am I liable to tax audit.
Please guide experts..
CA R SEETHARAMAN
(Expert)
19 August 2018
Yes tax audit applicable.
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Sumit Shaw
(Querist)
19 August 2018
Please sir share the rationale ..
CA R SEETHARAMAN
(Expert)
19 August 2018
Declaring less than 8% profit. Maintaining books of accounts go for audit or declare 8% profit.
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Sumit Shaw
(Querist)
19 August 2018
Thanks sir, one last query the 8% should be after deducting interest on capital or before that ? Suppose before deducting my net profit ratio is 8.2 % and after deducting interest on capital it is coming to 6 %. So in this case am I liable for tax audit ?
CA R SEETHARAMAN
(Expert)
20 August 2018
8% after deducting interest on capital.
Yes in this case 6% profit you are liable for tax audit.
Yes in this case 6% profit you are liable for tax audit.
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