Tds&tax audit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 June 2015 Dear Sir/ Madam,
One of my friend (as Individual) is engaged in the business of Trading and installation of supplied goods (separate billing and PO, not covered under Work Contract) of a Project company.

�For AY-12-13 Tax audit done u/s 44AB

For AY-13-14 no tax audit due to turnover below the prescribed limit.

For AY-14-15 Tax audit done u/s 44AB

For AY-15-16 turnover is Rs. 80 Lac.

�

�As in AY-2012-13 tax audit was done and in preceding year AY-2013-14 TDS provision applicable, but till today he has not applied for TAN.

As per market situation it seems he will not cross the limit as prescribed for Tax audit.

�

My query is as below:

A�� I want to know is he liable for tax audits u/s section 44AB or any other section for the AY-15-16

B�� In FY-15-16 (AY-2016-17) TDS provisions applicable on the same.

I mean for example he can claim Expenses for Professional charges from one person or firm above the threshold limit Rs. 30,000/-, he can pay above Rs. 75,000/- to any contractor without having TAN.

Waiting for your positive response.

�

Thanks in advance.

B.COM, ACA, DISA Namrata

B.COM, ACA, DISA Namrata (Expert)
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19 June 2015 Hello, TDS is required to be deducted by individual assesses only if they are covered under the provisions of Tax audit. However he should have obtained TAN no if he has deducted TDS earlier.

Querist : Anonymous

Querist : Anonymous (Querist)

19 June 2015 Sir thank you for your comments
Till now he has not deducted any TDS and dont have TAN.
As per business situatioan his turnover not cross the limit thats why dont want to take TAN.
And not liable for tax audit also sir

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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28 July 2025 Here’s a clear summary addressing your friend’s situation on **TDS and Tax Audit**:

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### Situation Recap:

* Individual engaged in trading + installation (billing separate, so not a work contract).
* Tax Audit done u/s 44AB for AY 2012-13 and AY 2014-15.
* No tax audit for AY 2013-14 (turnover below limit).
* For AY 2015-16 (FY 2014-15), turnover is ₹80 lakhs.
* No TAN obtained yet; no TDS deducted yet.
* Concerned about:

1. Whether tax audit is required for AY 2015-16.
2. Whether TDS provisions apply without TAN.
3. If payments beyond thresholds require TAN or TDS deduction.

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### Answers & Clarifications:

#### 1. Tax Audit Applicability (Section 44AB) for AY 2015-16:

* As per Section 44AB, tax audit is mandatory if:

* Turnover/gross receipts exceed ₹1 crore (₹50 lakhs in some cases for professionals),
* Or if presumptive income scheme is not opted.

* Since turnover for AY 2015-16 is ₹80 lakhs, **tax audit is not mandatory** because the threshold limit is ₹1 crore for business.

* So, **no tax audit required for AY 2015-16** unless other criteria apply.

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#### 2. TDS Deduction & TAN Requirement:

* **TAN (Tax Deduction Account Number)** must be obtained by a person responsible for deducting tax (deductor).

* Even if your friend did **not deduct any TDS so far**, but had to deduct (i.e., was liable to deduct TDS), TAN is mandatory.

* Since your friend **did not deduct TDS earlier** and turnover is below limit, **TAN is not mandatory at this point**.

* However, if he crosses thresholds for deduction of TDS on payments (professional fees, contractors, etc.) in the future, he must obtain TAN and deduct TDS accordingly.

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#### 3. Payment Thresholds & TDS Deduction:

* Payments to **professionals**: TDS under Section 194J at 10% if payment exceeds ₹30,000 in aggregate in a year.

* Payments to **contractors**: TDS under Section 194C at 1-2% if payment exceeds ₹30,000 for a single contract or ₹75,000 in aggregate during the year.

* **TAN is required if deducting TDS** on such payments.

* If no TDS is deducted (because payments are below thresholds or no obligation arises), TAN is not needed.

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### Summary:

| Aspect | Your Friend’s Case |
| ------------------------ | ---------------------------------------- |
| Tax Audit for AY 2015-16 | Not required (turnover ₹80L < ₹1Cr) |
| TAN Requirement | Not required if no TDS deducted yet |
| TDS Deduction | Applicable if payments exceed thresholds |
| TAN Mandatory | If TDS is deducted, TAN must be obtained |

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**Final advice:**

* Monitor payments carefully; if you cross TDS thresholds, **obtain TAN immediately and deduct TDS** timely.

* Since turnover < ₹1 crore, tax audit is **not mandatory** for AY 2015-16.

* Keep proper records of payments and deductions.

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If you want, I can help explain the exact procedure for applying TAN or calculating TDS on these payments. Would you like that?

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