Tax audit u/s 44AB for Partnership Firm

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This discussion clarifies whether a partnership firm with a turnover of ₹4,07,000 and a net profit of ₹49,313.5 is liable for a tax audit under Section 44AB. The consensus is that the firm is not liable for a tax audit as the profit exceeds the 8% threshold before deducting interest and remuneration for partners. The net profit before these deductions is considered the profit and gains from the business for audit purposes.

cox769

cox769 (Querist)
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31 January 2022 Turnover = ₹ 4,07.000
Net Profit as per P/L before appropriation = ₹ 49313.5
Share of Profit of Partners after allowing Interest on Capital & Remuneration = NIL
Assessee = Partnership Firm engaged in Business
Whether Firm is liable for Tax audit? Which Profit has to be treated as Profits & gains from business- Net profit or Share of Profit after Interest & Remuneration?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 January 2022 Tax audit would not be applicable even if you declare minimum 6/8% profit after deducting interest & remuneration. Balance will not be taxable....