Net income of a Firm is Less than 5% of Turnover after ...
This query is : Resolved
08 August 2010
Net income of a Firm is Less than 5% of Turnover after deducting Salary & interest to the Partners, Whether this income is eligible to get Audit ?
Total Turnover of a Partnership FIRM : 38,00,000/-
Income from business of Retail Trading (5% of Rs. 38,00,000/-) : 1,90,000
Salary & interest paid to partners as permitted by section 40b : 2,00,000
Income from Retail business: (10,000)
Total Turnover of a Partnership FIRM : 38,00,000/-
Income from business of Retail Trading (5% of Rs. 38,00,000/-) : 1,90,000
Salary & interest paid to partners as permitted by section 40b : 2,00,000
Income from Retail business: (10,000)
08 August 2010
As per proviso to section 44AF(2) interest and remuneration ,subject to 40(b), can be deducted from the 5 % profit computed under sub section 1 of section44AF. Hence your computation, prima facie, is correct.
Since 44AF is complied, audit under section 44AB is not necessary.
Since 44AF is complied, audit under section 44AB is not necessary.
09 August 2010
Agreed with Shri Warrier.
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