Tax Audit

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This discussion clarifies when a tax audit is mandatory for businesses and doctors, especially when not opting for presumptive taxation schemes like Section 44AD or 44ADA. For businesses with turnover under Rs 1 Cr, an audit is generally required if presumptive taxation was chosen in prior years. For doctors, even without opting for Section 44ADA, a tax audit becomes mandatory if their profit margin falls below 50%.

CMA Omkar.TIlve

CMA Omkar.TIlve (Querist)
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12 July 2020 Turnover of a businessman is less than Rs 1 Cr(Rs 86 lac). He doesn't want to opt for sec 44AD as his profit from the business is less than 8 % (Rs 4 lac aprox).
Same is the case for one of the doctor who runs a homeopathy clinic and has a turnover of approx Rs 26 lac and has net profit approx Rs 8 lac and doesn't want to opt of sec 44ADA

Are they both required to maintain books of accounts and get those audited from a CA..?

c.bakshi

c.bakshi (Expert)
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13 July 2020 FILE ITR - 3, NO NEED TO DO AUDIT OF THE FIRM

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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05 November 2021 1. In first case ...yes only if sec. 44AD was opted in any preceding years.
2. In second case, even if sec 44ADA not opted, 50% profit margin mandatory; otherwise tax audit mandatory.

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