Section 44AB - Tax audit in case of loss

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This discussion addresses whether a tax audit under Section 44AB is applicable to a new partnership firm with a turnover of Rs. 40,000 and a significant loss of Rs. 20 Lakhs. While Section 44AD might not apply due to the loss, the wording of Section 44AB regarding total income exceeding the non-chargeable threshold also suggests no audit is mandatory. The query explores options for carrying forward the loss, including filing a condonation application under Section 119(2)(b).

Nagaraj

Nagaraj (Querist)

07 September 2022 Hi,

Turnover Rs. 40,000
Loss Rs. 20,00,000
Partnership firm
first year of business

Tax Audit applicable or not?

44AB(e) carrying on the business shall, if the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year.

as per the above provision tax audit applicable,?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

07 September 2022 Tax audit not applicable in such a case.

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Nagaraj

Nagaraj (Querist)

07 September 2022 Sir, Thank for reply
Section 44ad is not applicable because Profit is less than 8%/6%
Section 44AB is not applicable because of wordings "and whose total income exceeds the maximum amount which is not chargeable to income-tax"

need to file under non audit case to carry forward loss. is there any other option to carry forward loss?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

07 September 2022 File condonation application under section 119(2)(b) with CIT.

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