Audit section 44ab

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Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2016 Dear all,
pvt. Company's profit before directors remuneration is exceed 8% but after providing the same to directors, the profit is being below 8% in this case weather audit under section 44AB is to be done or not

Thanx & Regard
Devesh Garg

Amol S Joglekar

Amol S Joglekar (Expert)
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24 March 2016 had it been more than 8% after remuneration, then the question of audit would not have arisen.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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24 March 2016 This 8% issue does not apply to Pvt Ltd Company.

Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2016 Sir... will the 8% issue is not apply to pvt. Company if yes then provide the relevent section for the same....

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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24 March 2016 Presumptive Taxation under sections 44 AD is applicable only to Individuals, HUFs and Partnership Firm but not Limited Liability Partnership Firm. Thereof a body corporate (limited, private limited & LLP) cannot opt for presumptive taxation. Bodies corporate need to maintain books of accounts which are to be audited as per provisions of Companies Act 2013, hence there is no plea for presumptive taxation. If the turnover of these entities is more than threshold limit prescribed by section 44 AB, then audit under those provisions is also applicable.

Querist : Anonymous

Querist : Anonymous (Querist)

25 March 2016 Sir i am confused that if profit before the director remuneration is exceed 8% and after providing remuneration to directors the profit is goes down below 8% however the turnover is below 1 crore, in this case weather audit u/s 44AB would be done or not.....

shivaji prasad bhimavarapu

shivaji prasad bhimavarapu (Expert)
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25 March 2016 If the turnover is below 1 crore, audit u/s 44 AB is not required. By the way totally ignore the concept of 8% for private companies. The income should be as per books of accounts only- no presumptive basis, irrespective of tirnover. Hope got it!!!!!!

VIPIN GUPTA

VIPIN GUPTA (Expert)
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26 March 2016 Please refer to the explanation for eligible assessee provided us 44AD

VIPIN GUPTA

VIPIN GUPTA (Expert)
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26 March 2016 Please refer to the explanation for eligible assessee provided us 44AD

PRADEEP KUMAR VATS

PRADEEP KUMAR VATS (Expert)
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26 March 2016 Dear

As per your Query, Following are the replies :

a) Firstly, As per the proviso of 44AD(2) , where the eligible assessee is a firm, the salary and interest paid to its partners shall be deducted from the income computed under sub-section (1) subject to the conditions and limits specified in clause (b) of section 40.

So, As per the reply of Suresh ji If it is Firm then you can avail the benefit of above mentioned proviso and still you need not get your account audit.

b) Secondly, before this budget , Limit under section 44AD was 1 Crore as defined in Explanation 2 of section 44AD,

"eligible business" means,—

(ii) whose total turnover or gross receipts in the previous year does not exceed an amount of one crore rupees.

Same limit is also mentioned under section 44AB, So, if it is a case of Firm then you are not required to get your audit done except if Assessee argue that its income is lower than {8% of Gross receipts minus Salary ,interest as per 40(b)}.

Further, Nothing applicable as said aforesaid , if it is a case of company as replied by Shivaji Ji.

Regards
Pradeep Kumar

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