IT Tax Audit

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This discussion clarifies when a tax audit is required for individuals with businesses. Generally, if your turnover is below £1 crore and net profit is below 6%, a tax audit is usually not required unless you've previously opted out of presumptive taxation schemes like 44AD and are declaring profits lower than the prescribed percentages. Specific rules apply if you're opting out of 44AD in the current year or if your income exceeds the basic exemption limit.

nitin gulati

nitin gulati (Querist)
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29 May 2021 Sir
In case of Business (For Individual)
Turnover Below 1 Cr and
Net Profit below 6%.
Whether Tax audit required in Current year.
1. First Year(New Business)
2.In case old business where return of PY filled as Regular showing profit more than 8% (but not opted 44AD)
3. In case Opted 44AD in PY.
Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 May 2021 1 yes tax audit required.
2 Tax audit applicable.
3 Tax audit applicable.

CMA Poornima Madhava

CMA Poornima Madhava (Expert)
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29 May 2021 If 44AD is not opted during the current year, why tax audit is still applicable?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 May 2021 Tax audit applicable if not opted for 44AD and declaring less than 8% profit.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 May 2021 Tax audit applicable if not opted for 44AD and declaring less than 8% profit.

nitin gulati

nitin gulati (Querist)
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31 May 2021 Sir
As per Relevant Clause (e) of 3CD(Tax Audit Report) U/S 44AB audit for 44AD opting clients will be done Only if :
Case falls 44AD(4) and income exceeds basic exemption limit
And In any clause 8 of tax audit It is not mentioned that audit required
If Profits u/s 44AD claimed to be lower than the presumptive profits and gains.[As for 44ADA it is mentioned in 44AB (d)]
I request you to share the section and sub section under which audit is required ALONG with relevant clause to be selected in case of Clause 8 of Tax Audit Report - If Profits u/s 44AD claimed to be lower than the presumptive profits and gains in case of new business never opted 44AD before(For Individual Sales less than 1 CR.)