Partnership firm
This query is : Resolved
04 March 2012
is it necessary for a partnership firm to get audited if it is incurring loss for the asstt. year 2011-12??
04 March 2012
For a business partnership firm -
Audit is necessary -
1. In a case the turnover exceeds 60.00 lacs.
2. It shows taxable income but claims that its Income before paying Interest and Remuneration to partners , is less than 8% of Turnover as prescribed U/s 44AD.
.
However, as per sub section 5 of Section 44AD, where Net Income/Total Income results into loss , than it can not be said that the income exceeds the maximum amount which is not chargeable to tax.
So, in such a case Tax Audit is not required.
Audit is necessary -
1. In a case the turnover exceeds 60.00 lacs.
2. It shows taxable income but claims that its Income before paying Interest and Remuneration to partners , is less than 8% of Turnover as prescribed U/s 44AD.
.
However, as per sub section 5 of Section 44AD, where Net Income/Total Income results into loss , than it can not be said that the income exceeds the maximum amount which is not chargeable to tax.
So, in such a case Tax Audit is not required.
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