Tax audit
This query is : Resolved
16 May 2013
I am the developer of flat.... and sale flats through agreement of sale.. during the assesment year recive 1.1 corer for advance against aggrement of sale of flat... I requir to do tax audit books of my accounT ?? what consequenses in same case if assese is company
16 May 2013
Ya, it is apllicable
Guest
Guest
(Expert)
17 May 2013
There is a new provision section 194 IA which is now applicable to in the case of sale land and building, must ensure its satisfication
19 May 2013
Thanks... sir can u refer any case or section then i can argue with my ca
26 July 2025
Sure! Here's a detailed explanation and some legal references you can use while discussing with your CA:
---
### Tax Audit Applicability for Advance Received on Sale of Flats
1. **Is tax audit applicable when you receive advance of Rs. 1.1 crore against agreement of sale of flat?**
* Yes, **tax audit under Section 44AB of the Income Tax Act is applicable** if your total turnover or gross receipts exceed Rs. 1 crore (for business other than presumptive schemes).
* Receiving Rs. 1.1 crore as advance is part of your gross receipts/turnover, so tax audit is triggered.
* Tax audit needs to be conducted if your total business turnover or gross receipts exceed Rs. 1 crore in the financial year.
---
### If Assessee is a Company
* The limit for tax audit applies equally.
* As companies are usually required to maintain books and get them audited, **tax audit will definitely be required if turnover exceeds Rs. 1 crore**.
* Also, companies have additional compliance like mandatory statutory audit under the Companies Act, which is separate but related.
---
### Section 194-IA: TDS on Sale of Immovable Property
* **Section 194-IA** was introduced for deduction of TDS @1% on consideration for transfer of immovable property (other than agricultural land) exceeding Rs. 50 lakh.
* This is applicable at the time of payment or credit to the seller.
* As a buyer, TDS must be deducted and deposited with the government.
* As a seller, you need to ensure TDS certificate is obtained and reflected while filing return.
---
### Legal References You Can Use:
* **Section 44AB** of Income Tax Act — Tax Audit applicability on turnover exceeding Rs. 1 crore.
* **Section 194-IA** — TDS on sale consideration of immovable property.
* **CBDT Circular No. 7/2013** — Clarifications on tax audit applicability for real estate transactions.
* **Income Tax Act, Explanation 2 to Section 44AB** — Regarding inclusion of advance receipts for tax audit turnover.
---
### Suggested argument with CA:
* "Since advance receipts are part of gross receipts, tax audit under Section 44AB is applicable as turnover exceeds Rs. 1 crore."
* "Also, Section 194-IA requires TDS deduction on sale consideration above Rs. 50 lakh, so we must comply with TDS provisions along with tax audit."
---
If you want, I can draft a formal letter or email to your CA citing these references. Would you like that?
---
### Tax Audit Applicability for Advance Received on Sale of Flats
1. **Is tax audit applicable when you receive advance of Rs. 1.1 crore against agreement of sale of flat?**
* Yes, **tax audit under Section 44AB of the Income Tax Act is applicable** if your total turnover or gross receipts exceed Rs. 1 crore (for business other than presumptive schemes).
* Receiving Rs. 1.1 crore as advance is part of your gross receipts/turnover, so tax audit is triggered.
* Tax audit needs to be conducted if your total business turnover or gross receipts exceed Rs. 1 crore in the financial year.
---
### If Assessee is a Company
* The limit for tax audit applies equally.
* As companies are usually required to maintain books and get them audited, **tax audit will definitely be required if turnover exceeds Rs. 1 crore**.
* Also, companies have additional compliance like mandatory statutory audit under the Companies Act, which is separate but related.
---
### Section 194-IA: TDS on Sale of Immovable Property
* **Section 194-IA** was introduced for deduction of TDS @1% on consideration for transfer of immovable property (other than agricultural land) exceeding Rs. 50 lakh.
* This is applicable at the time of payment or credit to the seller.
* As a buyer, TDS must be deducted and deposited with the government.
* As a seller, you need to ensure TDS certificate is obtained and reflected while filing return.
---
### Legal References You Can Use:
* **Section 44AB** of Income Tax Act — Tax Audit applicability on turnover exceeding Rs. 1 crore.
* **Section 194-IA** — TDS on sale consideration of immovable property.
* **CBDT Circular No. 7/2013** — Clarifications on tax audit applicability for real estate transactions.
* **Income Tax Act, Explanation 2 to Section 44AB** — Regarding inclusion of advance receipts for tax audit turnover.
---
### Suggested argument with CA:
* "Since advance receipts are part of gross receipts, tax audit under Section 44AB is applicable as turnover exceeds Rs. 1 crore."
* "Also, Section 194-IA requires TDS deduction on sale consideration above Rs. 50 lakh, so we must comply with TDS provisions along with tax audit."
---
If you want, I can draft a formal letter or email to your CA citing these references. Would you like that?
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