Tax audit of partnership firms covered u/s44ad ?mandatory?

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This query is : Resolved

C.A SHASHANK GOYAL (Querist)
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28 September 2011 If firm has turnover of Rs3000000 and covered under section 44AD and he wants to show the income less than 8% , that his income is actually 0 then also he will have to get his tax audit done , which is not the case with individual and huf as they have exemption limit or maximum amount not chargeable to tax .
REMEMBER : Firm has no exemption limit.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 September 2011 As per Section 44AB, if Section 44AD is opted & income is claimed to be lower than 8%, tax audit is compulsory.

C.A SHASHANK GOYAL

C.A SHASHANK GOYAL (Querist)
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28 September 2011 Sir , but this section is automatically applicable or we have to opt for it .
Thanx in advance

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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29 September 2011 Which Section are you talking about?

Section 44AD or Section 44AB.

The proviso to Section 44AD provides that where the income is claimed to be less than 8%, maintenance of accounts u/s 44AA & audit u/s 44AB shall be mandatory.

So, if you are claiming lower income, the provisions of Section 44AA & 44AB are automatically attracted.

The assessee is not given an option. It becomes mandatory.

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