AUDIT FOR PROPRIETORSHIP

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This discussion clarifies the audit requirements for a proprietorship business that incurred losses in the April 2021 - March 2022 financial year. While a turnover below Rs 1 crore might seem to exempt businesses from audits, specific conditions related to previous years' tax filings, particularly opting for Section 44AD, can still necessitate an audit. This is crucial if you intend to show losses to be carried forward to subsequent years.

B K D

B K D (Querist)
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23 December 2021 I HAVE A PROPRIETORSHIP BUSINESS .. APR 20 - MARCH 21 THE TURNOVER WAS LESS THAN RS 2L BUT THE EXPENSES WERE HIGER THEREBY INCURRING LOSSES .. DO I NEED TO AUDIT MY ACCOUNTS AS I WANT TO SHOW LOSSES TO BE CARRIED FORWARD FOR NEXT YEAR .. KINDLY GUIDE ..

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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23 December 2021 Whether you had opted sec. 44AD in any preceding year?
What is your aggregate income in previous year? (excluding the loss)

B K D

B K D (Querist)
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24 December 2021 YES PAST 6 TO 7 YEARS I HAD OPTED FOR 44AD .. ITR4 .. LAST YEAR WAS AROUND 7 LACS

B K D

B K D (Querist)
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24 December 2021 YES PAST 6 TO 7 YEARS I HAD OPTED FOR 44AD .. ITR4 .. LAST YEAR WAS AROUND 7 LACS .. THIS YEAR FILING ITR3

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 December 2021 If you have declared the income under sec. 44AD in preceding five years continuously, you need not audit the account in the PY and declare loss under ITR. Though there is little chance of objection from department.

B K D

B K D (Querist)
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24 December 2021 IF I AM NOT WRONG THERE IS A CRITERIA FOR AUDIT WITH REGARDS TO MINIMUM TURNOVER .. I THINK LESS THAN 1 CR THERE IS NO AUDIT ??

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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24 December 2021 Yes, that condition is not applicable in your case, but liability of sec. 44AB(e) r.w.s. 44AD(4) may get attracted.

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