Tax audit partnership firm

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2016 Dear Experts,
In AY 2016-17 Before partners interest & salaries
Net profit is above 8% and after providing the same to partners net profit is below 8% however turnover is also below 1 crore. In this scenario weather the firm need to get audited or not,

Thanks & Regard
Shobhit Awasthi

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 October 2016 No need of tax audit in view declaring 8% profit.

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2016 Sir we are not declaring 8% profit. Profit is below 8% after partners interest & salaries and all the expenses but before partners interest & salaries NP is above 8% weather tax audit applicable u/s 44AB

CA Aman kesharwani

CA Aman kesharwani (Expert)
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12 October 2016 The Partnership Firms were previously eligible to claim deduction of Partners Remuneration and Interest paid to partners out of the Deemed Profit declared under this section, however w.e.f. A.Y. 2017-18 Proviso to Sub-Section 2 to Section 44 AD has been omitted and hence it is presumed that the Partners Remuneration and Interest have already been deducted before calculating the Deemed Profit.

Hence Tax Audit is Applicable U/s 44AB For AY 2017-18 and not for AY 2016-17

Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2016 In AY 2016-17 we are declaring profit
4.89% after providing interest & salaries to partners in AY 2016-17
we can claim the deduction of interest & salaries paid to partners
hence No Tax audit applicable u/s 44AB in my case,
I am right.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 October 2016 Yes you are right.....................

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