Tax Audit - Income below Taxable Limit?
This query is : Resolved
22 October 2010
As per sec.44AB, a person is required to get his accounts audited if his total sales, turnover or gross receipts exceed 40 lacs (60 lacs w.e.f.AY 2011-12). A person having his gross total income below the taxable limit for any AY need not file his return of income. So, looking at these 2 things, can a person escape from tax audit as he has income below the taxable limit & so need not file return. ITD uses Tax Audit Report to facilitate assessment of income but if a person is not required to file his return of income at all then can he avoid tax audit?
Plz advise
Plz advise
22 October 2010
Tax audit is compulsory irrespective of the income of the assessee as the same is based on the turnover of the company and not the profit. So tax audit is compulsory in any case.
Now for the return part u have to decide that even after getting the books audited u want to file the return as not if not compulsorily required u/s 139(1). If u do not file the return there is always a chance that penalty u/s 271B for failure to get the accounts audited is levied.
Now for the return part u have to decide that even after getting the books audited u want to file the return as not if not compulsorily required u/s 139(1). If u do not file the return there is always a chance that penalty u/s 271B for failure to get the accounts audited is levied.
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22 October 2010
On first assessment your interpretation seems to be correct, however technically one needs to get his account audited as per section 44AB of IT on or before the due date for filing the return of Income if turnover exceeds the specified limits. Thus tax audit requirement can not be done away with in this case. In case of Company assessee it is compulsory to file return of Income in every case whether loss or nominal profits. So no escapement for obligation u/s 139(1) for companies. For firms and societies the filing of return becomes necessary as there is no threshold limits for them. Only in case of Individual and HUF that too if their income is below thresh hold limit but it is not a loss else they will not be able to carry forward that loss.
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