Tax audit query related

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This discussion clarifies whether a tax audit is mandatory for a private limited company with a turnover of ₹5 lakh in the current financial year, down from ₹1.5 crore last year. The consensus is that a tax audit is not mandatory in this scenario, provided cash receipts and payments do not exceed 5% of the total turnover and payments, respectively. This exemption applies regardless of the cash limit mentioned in the initial query, as the primary threshold is met.

deepak

deepak (Querist)

09 February 2022 If Pvt ltd last year turnover was 1.5 crore And filed tax audit in last a.y. 20.21. but now this a.y. 21.22 turnover is only 5 lac so this time tax audit mandatory or not?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

09 February 2022 No..... Provided that—
(a) aggregate of all amounts received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed five per cent of the said amount; and
(b) aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed five per cent of the said payment.