Updated Online video classes available for CA,CS,CMA for May20 and Nov20 batch. Call: 1800-3000-0505

Tax audit applicability

This query is : Resolved 

Kindly guide me in this query.

While filing ITR for a partnership firm,
Total Sales – Rs. 25,00,000
Net Profit before interest and salary– Rs. 4,50,000
Interest on Partner’s Capital- Rs. 75,000 Salary to Partners- Rs. 250,000

Net Profit after Interest and Salary- Rs. 1,25,000

Criteria for 8% of turnover is net profit before interest & salary or after interest and salary ?

Kindly advice me on the same. So, since 1,25,000 is less than 8% , does it qualify for tax audit ?

Opt 44AD and show 2,00,000 profit tax audit not applicable. Since 1,25,000 is less than 8%, it qualify for tax audit.

Yes... I agreed with Mr CA R Seetharaman Sir...

As per sec 44AD Partners can't claim Interest & remuneration. They must show profit 8% /(6%) or above. Otherwise tax audit will kick...

You need to be the querist or approved CAclub expert to take part in this query .

Click here to login now

Similar Resolved Queries :

CA Learning