Tax Audit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 July 2010 Whether purchase is counted in "sales, turnover & gross recipts" as per income tax act for determing 40 lakhs limit?

what is the definition of "Turnover" as per income tax act? does it include purchase also?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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30 July 2010 No purchase is not counted.

A person is required to get his accounts audited u/s 44AB if turnover of business exceeds Rs 40 Lakhs(60 lacs from fy 2010-11), or In case of Profession Gross Receipts exceed Rs 10 Lakhs(15 Lacs from fy 2010-11)

In the “Guidance Note on Terms used in Financial Statements” published by ICAI, “the expression “Sales Turnover” has been defined as: “The aggregate amount for which sales are effected or services rendered by an enterprises. The term ‘gross turnover/sales’ and ‘net turnover/sales’ are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts”

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