Tax audit applicable

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NK1976

NK1976 (Querist)
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28 May 2017 Dear Expert,
I want to know that tax audit applicability in following :
1) The company is Nbfc
2) Income is 1.10 Crore including 92 Lacs dividend on shares & MF and profit on Sales of MF - 18 lacs.
3)No other income
4) Form 61A applicable or not to company.

Please advise me in above case Tax Audit applicable or not.

Thanks

CA Mohit Kumar

CA Mohit Kumar (Expert)
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29 May 2017 tax audit is required when turnover cross 2 crore in FY 16-17 ..but in your case it is below the limit hence, not applicable..

Studentsca

Studentsca (Expert)
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29 May 2017 Tax audit Is applicable For Turnover being above 1 CR if you are not oppting for sec 44 AD, since the income you have earned is not taxable like Dividend. No Audit is applicable.

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NK1976

NK1976 (Querist)
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29 May 2017 Form 61A applicable or not to company.
Is SFT Required to be Filled for Nil Transaction

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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26 July 2025 Here’s a clear breakdown for your query:

### Tax Audit Applicability:

* For **NBFC (Non-Banking Financial Company)** or any company, tax audit under **Section 44AB** is applicable if **turnover/gross receipts exceed Rs. 1 crore (for FY 2016-17)**.
* However, dividend income is **exempt and not considered as business turnover** for tax audit purpose.
* Profit on sale of mutual funds (business income) is considered, but total turnover from such business activities should exceed Rs. 1 crore for audit to be mandatory.

**In your case:**

* Income includes Rs. 92 lakhs dividend (exempt for audit) + Rs. 18 lakhs profit on sales (business income).
* Total relevant turnover = Rs. 18 lakhs only (less than 1 crore), so **tax audit is NOT applicable**.

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### Form 61A (SFT - Statement of Financial Transactions):

* Applicable if specified transactions exceed thresholds (like purchase/sale of shares, mutual funds, etc.).
* Dividend income itself **does not attract Form 61A** reporting.
* Sale of mutual funds may attract SFT if amount exceeds Rs. 10 lakhs in aggregate in a year.
* Even if there are no transactions, **nil filing** may or may not be required depending on income tax department instructions. Usually, **if no specified transactions, nil statement may be filed or can be left** as per latest instructions.

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