Tax audit for fy 2019-20

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This discussion addresses whether a tax audit under Section 3CB-3CD is applicable for the financial year 2019-20, given a turnover of Rs 1.40 Crores with 95% of transactions via bank. The declared profit was 4.22%, which is below the typical 6% threshold. It's clarified that if profit remains below 6% (or 8% for non-bank transactions), Section 44AB is invoked, making a tax audit mandatory.

swetha

swetha (Querist)
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16 January 2021 The Turnover is Rs 1.40 Crores and 95% of the transactions are done through bank. The profit percentage declared is 4.22%. ( They have not opted for 44AD section ) Whether 3cb-3cd Tax audit is applicable for fy 2019-20

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 January 2021 Profit declared less than 6% tax audit applicable.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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17 January 2021 NOT REQUIRED IF YOU DECLARE PROFIT MORE THAN 6% ON SALES THROUGH BANK AND 8% ON REMAINING TRANSACTION.

IF YOU WANT TO DECLARE PROFIT AT 4.22% THEN SECTION 44AB INVOKED AND YOU WILL BE LIABLE TO GET YOUR BOOKS OF ACCOUNT AUDITED

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