Tax Audit

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Abhay Gujarathi (Querist)
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08 October 2010 Dear all,

one of my clint, pvt ltd co, engaged in Development of Software. so kindly inform me the limit.. whether limit of 40Lacs or 10 lacs applicable for Tax audit..

Thanks

CA Navin Jain

CA Navin Jain (Expert)
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08 October 2010 LIMIT OF RS. 40 LACS TO BR CONSIDERED

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Abhay Gujarathi

Abhay Gujarathi (Querist)
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08 October 2010 Thanks for reply..

Can you inform,where it is written.. If soft copy of the same is available than kindly send me on my id : abhay_jba@yahoo.co.in

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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26 July 2025 Hey! About your query on **tax audit limits for a private limited company engaged in software development**:

### Tax audit limit applicable:

* For companies (other than those covered under presumptive taxation u/s 44AD), **Section 44AB** applies.
* The **turnover limit for tax audit under Section 44AB is Rs. 1 crore for businesses** and **Rs. 50 lakhs for professions**.
* But in the case of software development (which is considered a business activity), the limit is Rs. **1 crore** turnover for audit applicability.
* The figure Rs. 40 lakhs you mentioned is generally for professionals, not for business companies.
* The Rs. 10 lakhs limit does not apply for companies; it generally applies for presumptive income schemes for individuals/HUF/partnerships.

### Reference:

* The limit and provisions are mentioned in **Section 44AB of the Income Tax Act**.
* The CBDT notifications and the Income Tax Rules also cover these provisions.

If you want, I can help you get the relevant section or the official link to Income Tax Act/Rules related to this.

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**Summary:**
For software development company, the turnover threshold for tax audit is **Rs. 1 crore** under section 44AB. So, if turnover exceeds Rs. 1 crore, tax audit is applicable.

Let me know if you want me to email detailed notes or relevant sections!

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