Partnership Firm CA

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This discussion clarifies tax audit requirements for Chartered Accountant firms not opting for presumptive taxation under Section 44ADA. Even if fees are below Rs. 50 Lakhs, if your profit margin is less than 50% of your turnover, you are likely liable for a tax audit under Section 44AB. The software flags this, advising either to get accounts audited or declare a minimum profit of 50%.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)
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29 July 2023 Our is Chartered Accountant Firm having fees below Rs.50 Lakhs
We are not opting for presumptive taxation u/s 44ADA

Software through we are compiling and filing Income Tax Return gives following warning
As the profit is less than 50% of the Turnover, you are liable to get your accounts audited u/s 44AB. Hence, get your accounts audited, fill up Tax audit data in 'ITR Data entry' window and '3CD' window and select the Due date as '31-Oct-2023 - Audit case' in 'Home' page. Alternatively, declare minimum profit of 50% on Turnover u/s 44ADA. However, if you disagree, you can ignore this warning and generate ITR.

Is Tax audit applicable in our case