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Reply to query u/s 44ad if firm is loss

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Querist : Anonymous

Querist : Anonymous (Querist)

09 August 2013 Sir,
With due respect I want to ask the learned CA Mr. Paras Bafna in respect to his valuable reply to Query u/s 44 AD, when firm is in loss.
Sir U have mentioned that the firm can not claim the loss unless & until the accounts have not been audited u/s 44AB.
Kindly enlighten me the section and provisions relating to it.
We shall be highly thankful to U.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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10 August 2013 A firm can claim loss u/s 44AD WITHOUT getting its accounts audited.

Section 44AD(5) provides that an eligible who claims income less than 8% AND whose TOTAL INCOME EXCEEDS THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX is required to get his accounts audited.

Maximum amount not chargeable to tax in case of firm is 0 (NIL).

Since there is a loss, the income DOES NOT exceed the maximum amount not chargeable to tax.

Accordingly the firm is NOT required to get its accounts audited.

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