Audit required or not?

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2014 my client has textile business income for financial year 2012-13 : 172511/-
(6.176% of turnover)
turnover is 2792980/-
interest income : 33569/- i.e. total income 206080/-
then necessary audit required, if not doing audit. then profit should 8% of turnover (persumtive income), yes or not

please urgent...

CA. Amit G. Chandani

CA. Amit G. Chandani (Expert)
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28 June 2014
you are right, tax audit will be required since total income is exceeding 2 lakh.

Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2014 BUT INTEREST INCOME IS PART OF TOTAL INCOME.
According to Section 44AD(1) an eligible person having turnover up to one crore from eligible business may adopt presumption income scheme by declaring his business income as 8 % of the turnover.

Further as per Section 44AD (5)
Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.
So as per section 44AD(5) above, if eligible person having turnover less than 1 crore but profit claims to be less than 8% ,then Tax audit u/s 44AB is mandatory.

Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2014 as per Section 44AD (5) "...whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.

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