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44AB or 44AD???

15 March 2021

I have one question about, as I have Tournover 3.5 Cr, which are 95%, of transactions are through Net banking, wheather I can declared 6% of my Tournover or I should do audit?

plz let me ans please as soon as possible

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14 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 16 March 2021

If you opt for 44AD, turnover should be greater than 2 crores rupees then for online transactions Profit should be shown as 6% of turnover. If you show Profit less than 6% of turnover then tax audit is compulsory but if you show profit @ 6% or greater than 6% of turnover then tax audit is not applicable. You should opt for presumptive taxation u/s 44AD

ABUSAYED MUJAWAR (27 Points)
Replied 16 March 2021

100% correct sir but in winman, it's not allowing to take excesses of 2 Cr, it's showing your Tournover exceed above 2 Cr, u need to do Audit like this

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 16 March 2021

Yes as turnover exceeds 2 crore rupees tax audit is compulsory for you u/s 44AD irrespective of profit.

ABUSAYED MUJAWAR (27 Points)
Replied 16 March 2021

Haa sir but I don't wanna go for audit, I wanna show it under section 44AD itself

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 16 March 2021

But audit is applicable on your case

ABUSAYED MUJAWAR (27 Points)
Replied 16 March 2021

Can you please share your contact number to talk with about this matter

CMA Poornima Madhava (CMA) (13097 Points)
Replied 16 March 2021

Provisions of section 44AD can be applied only when the turnover/gross receipt is up to ₹2 crores.

anil jain (Partner) (1067 Points)
Replied 17 March 2021

You are not eligible for 44AD as turnover exceeds 2 Cr.

anil jain (Partner) (1067 Points)
Replied 17 March 2021

You are also not liable to Tax Audit as your Turnover (with 95% or more (non cash transactions)) does not exceeds 5Cr.

ABUSAYED MUJAWAR (27 Points)
Replied 17 March 2021

I agree with you sir, but it winman it's not taking please guide me properly, as last date is coming

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 17 March 2021

Agree with anil, It was my mistake to understand the query

CA. Aditya Goel (Chartered Accountant) (681 Points)
Replied 18 March 2021

Trying to reply in simplest form for your better understanding and clarity

1. Since Turnover is > 2 Cr - 44AD is not applicable - resolved

2. Turnover Limit for Tax Audit is 1 Cr and its 10 Cr in case atleast 95% of aggregate of all receipts and payments are in digital/non cash form

hence in your case, Tax audit is not required (though you must thoroughly check the 95% eligibility carefully) and hence no need to declare any fixed % of profit i.e. prepare proper books of accounts and show the actual profit or loss (whatever the case)

Hope this helps
CA. Aditya Goel
Nine 8 7 3 3 7 7 7 0 2

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ABUSAYED MUJAWAR (27 Points)
Replied 18 March 2021

I have shown in winman Under section 44AD @ 6% profit in case recived 95% transactions through Net banking,

Even though, a message is showing in winman as total receipt are greater than Rs 2cr, you have to get your books audited and file report u/s 44AB

CMA Poornima Madhava (CMA) (13097 Points)
Replied 22 March 2021

1) Since turnover/total receipts are >2cr, you cannot avail provisions of 44AD (i.e. declaring profit @ 6% is applicable only when the turnover/total receipts are up to 2cr)

2) Instead you need to declare actual profit and pay tax accordingly

3) If cash receipts and payments are limited to 5% of turnover/total receipts. then no tax audit u/s 44AB is applicable as the turnover/total receipts are <5cr (for FY19-20).