Tax audit requirement in case profit is less than 8%
This query is : Resolved
15 April 2014
assessee has turnover Rs. 60,00,000/- but he file return with GTI Rs. 1,80,000/- only now assessee is require to get audit to accounts. if he file ITR-4.
15 April 2014
According to the section 44AD an business assessee whose gross turnover/receipts doesn't exceeds tax audit limit specified u/s 44AB are required to offer their income from business u/s 44AD i.e minimum of 8% on their gross turnover/receipts and those offering their income under this section not required to maintain regulars books of accounts as specified in section 44AA.
Those who are not liable to tax audit u/44AB and liable to offer their income u/s 44AD but they offering lower income than specified minimum profit in the section 44AD then required to satisfy the following two conditions
1) Required to maintain regular books of accounts as per section 44AA
2) If his taxable income exceeds basic exemption limit then required to make tax audit u/s 44AB.
In your case your assessee liable to offer income according to section 44AD but he offering lower income than specified in section 44AD, so he must and should be required to maintain regular books of accounts as per section 44AA and his gross total income doesn't exceeds basic exemption limit(assumed basic exemption limit is Rs.2,00,000) so need not to make tax audit u/s 44AB and he must and should be required to file ITR-4 as regular books of case. Just because of filing of ITR-4 not required tax audit. So he has to file ITR-4 without tax audit but with regular books of accounts(means has to fill balancesheet and profit and loss account).
OM SAI SRI SAI JAI JAI SAI
Those who are not liable to tax audit u/44AB and liable to offer their income u/s 44AD but they offering lower income than specified minimum profit in the section 44AD then required to satisfy the following two conditions
1) Required to maintain regular books of accounts as per section 44AA
2) If his taxable income exceeds basic exemption limit then required to make tax audit u/s 44AB.
In your case your assessee liable to offer income according to section 44AD but he offering lower income than specified in section 44AD, so he must and should be required to maintain regular books of accounts as per section 44AA and his gross total income doesn't exceeds basic exemption limit(assumed basic exemption limit is Rs.2,00,000) so need not to make tax audit u/s 44AB and he must and should be required to file ITR-4 as regular books of case. Just because of filing of ITR-4 not required tax audit. So he has to file ITR-4 without tax audit but with regular books of accounts(means has to fill balancesheet and profit and loss account).
OM SAI SRI SAI JAI JAI SAI
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16 April 2014
if gross receipt is 80lakh and maintain proper books accounts and file return properly in itr - 4 with balance sheet and p&l details but show his profits 250000 and pay tax rs 5000. now liable for tax audit?
16 April 2014
Yes, in that case required to make tax audit.
OM SAI SRI SAI JAI JAI SAI
OM SAI SRI SAI JAI JAI SAI
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02 October 2021
For eligible business carried by eligible assessee, minimum 8% profit margin is mandatory; otherwise tax audit liable.
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