Tax audit applicability
This query is : Resolved
19 August 2019
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 ?
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 ?
19 August 2019
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.
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19 August 2019
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...
As per sec 44AD Partners can't claim Interest & remuneration. They must show profit 8% /(6%) or above. Otherwise tax audit will kick...
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