Tax audit
This query is : Resolved
03 August 2013
Sir
I have one client whose turnover is less than 1 crores and profit is also less than 8% but he is not opting for 44AD, now could you please confirm whether he is lible for tax audit. Please also confirm in which case person is lible for tax audit.
I have one client whose turnover is less than 1 crores and profit is also less than 8% but he is not opting for 44AD, now could you please confirm whether he is lible for tax audit. Please also confirm in which case person is lible for tax audit.
Rupesh Jain
(Expert)
03 August 2013
he have to audit his a/c due to profit declare less than 8% of turnover
I a person turnover over rs. 1.00 then he have to compulsory audit of his a/c then no case of profit it is 8% or not
I a person turnover over rs. 1.00 then he have to compulsory audit of his a/c then no case of profit it is 8% or not
03 August 2013
but according to section 44AB if turnover is more than 1 crore then only he is liable for tax audit
03 August 2013
but according to section 44AB if turnover is more than 1 crore then only he is liable for tax audit
Rupesh Jain
(Expert)
03 August 2013
its optionl but if you fall under 44af due to sale is below 1 crore then you have to declare 8% profit or take audit report
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03 August 2013
and if the firm have loss then also he is required to do tax audit
03 August 2013
sir
but now 44af has been abolished, and 44ad says if you opt for it, you dnt have to maintain a books of accounts and no need for tax audit and 44ab says that if your turnover is more than 1 crore than you are lible for tax audit.
but my client have manufaturing business and his turnover is 77 lakh and his profit 530448 as per books,
now my question is his turover is not exceeding 1 crore and he is not opting for 44ad also so when i m filing his return then software is saying you are lible for for tax audit.
When his turnover is not more then 1 crore then why he is lible for tax audit?
but now 44af has been abolished, and 44ad says if you opt for it, you dnt have to maintain a books of accounts and no need for tax audit and 44ab says that if your turnover is more than 1 crore than you are lible for tax audit.
but my client have manufaturing business and his turnover is 77 lakh and his profit 530448 as per books,
now my question is his turover is not exceeding 1 crore and he is not opting for 44ad also so when i m filing his return then software is saying you are lible for for tax audit.
When his turnover is not more then 1 crore then why he is lible for tax audit?
CA. RICHI SAXENA
(Expert)
03 August 2013
Swati mam the reason is as simple as that any business showing profits less than 8% and whose turnover doesnt exceeds 1 crore is also liable for tax audit.
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CA. RICHI SAXENA
(Expert)
03 August 2013
And yes Sec 44AD is optional.
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03 August 2013
thank you richi sir
and in case where business is having loss then also he is liable for tax audit now?
Please confirm
and in case where business is having loss then also he is liable for tax audit now?
Please confirm
03 August 2013
now in every case if his profit is more then exemption limit and turnover less than 1 crore and he is showing profit less then 8% then he is liable for tax audit.
Please confirm what will be the provision for partnership firm?
in case of partnership, for rs 1 profit also he is lible for tax audit.
Please confirm what will be the provision for partnership firm?
in case of partnership, for rs 1 profit also he is lible for tax audit.
CA PARAS BAFNA
(Expert)
03 August 2013
If Net profit is Re.1, than technically -Audit U/s 44AD(5) vis-a-vis U/s 44AB(d) will
be compulsory.
.
Provision for firms:
---------------------
Show 8% Profit on Turnover.
Deduct Interest from it.
From the balance deduct salary to partner(Max. salary is allowable as per Section U/s 40(b))
If there is a loss no need to get the accounts audited. If-profit- pay tax @ 30% on such profit.
.
.
be compulsory.
.
Provision for firms:
---------------------
Show 8% Profit on Turnover.
Deduct Interest from it.
From the balance deduct salary to partner(Max. salary is allowable as per Section U/s 40(b))
If there is a loss no need to get the accounts audited. If-profit- pay tax @ 30% on such profit.
.
.
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CA. RICHI SAXENA
(Expert)
06 August 2013
Paras Sir has correctly replied to your query.
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