Assesee turnover for the year is Rs 15 lakhs. He maintains proper books of accounts and files the return for net profit of Rs 98,000 which is less than 8%.
Is tax audit mandatory? What are the penal provisions in these cases. Assesee doesnt want to opt or 8% scheme as he as to submit detailed financials to the bank for loan pupsose.
25 January 2018
To Summarize the provisions of the income tax act tax audit is mandatory if 1 The Turnover of the Assessee is more then 2 crores or 2. Assessee declares less then 6% profit on the sale made through bank and 8% on cash sale.
In your case the profit is 6.53%. First if the entire sale is through bank you need not to go for the tax audit. But ya if it also includes cash sale and applying the above percentage it increases the limit of presumptive profit to be shown then you need to maintain books of accounts and to have tax audit of the accounts
if a person fails to comply with the provisions relating to the Income Tax Audit (Section 44AB), there is a penalty of 0.5% of the total turnover or Rs. 1,50,000 whichever is less. However, if a person has a reasonable cause for non-filing of the tax audit report, then such a penalty may not be levied on him.
CAclubindia
