Income tax return

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This discussion addresses which income tax return to file for a wholesaler with a 2% profit margin and no books of accounts. The general advice is to file ITR 4 under Section 44AD, but a profit below 8% typically necessitates a tax audit. Options include maintaining proper books of accounts or declaring a profit above 8% to avoid the audit. The query also touches upon whether a 6% profit margin is acceptable if payments are received electronically rather than in cash.

Bina Nair

Bina Nair (Querist)
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01 April 2020 Hello there. I'd like to know which return to be filed in case my client is a wholesaler with a profit margin of 2% without books of accounts.

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swasti

swasti (Expert)
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02 April 2020 In case of no books, ITR 4 will be filed U/s 44AD, but since profit is less than 8%, audit would be compulsory.

Spurto Consultancy Services

Spurto Consultancy Services (Expert)
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02 April 2020 I will agree with Swasti, either maintain books of accounts or show profit more than 8% under section 44AD. If not then tax audit will be compulsory.