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44AD

Suresh Pai S (Tax Consultant) (1029 Points)

12 September 2017

An individual has sales of Rs 50 lakhs. He incurrs a loss. Is he liable for tax audit. Assume that he doesn't have any other income.

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17 Replies

GST Consultant (Tax Consultant) (894 Points)
Replied 12 September 2017

yes...... tax audit is compulsory in your case

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 12 September 2017

[(e) carrying on the business shall, if the provisions of sub-section (4) ofsection 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,]

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 12 September 2017

How do you think that subsection 4 of section 44AD is applicable to him?

Sanny Vora (16 Points)
Replied 12 September 2017

maximum amount which is not chargeable to tax is applicable in case of individual assessee only

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 12 September 2017

In my opinion tax audit is not applicable. does anyone agree?

1 Like

Luvish Jain (Tax Consultant) (507 Points)
Replied 13 September 2017

ofcourse he is liable, business income must be shown at minimum 8% of sales or else audit is compulsory to be done. i.e. either in 44ad or ada or normal provision too audit is compulsory to be done.

SabuCS (soleproprietorship) (45 Points)
Replied 13 September 2017

Yes. Tax audit is necessary because 8 of his turnover is in taxable limit. If this amount was below taxable income audit not necessary. That is my opinion.

SabuCS (soleproprietorship) (45 Points)
Replied 13 September 2017

Sorry read as 8 percent of his turnover is above taxable limit. If it was below taxable limit then tax audit not necessary. My opinion

RAJA P M ("Do the Right Thing...!!!") (127058 Points)
Replied 13 September 2017

Yes. I agreed to You Mr. Suresh Pau.,
Not required Tax Audit...

agarwalaks (CA) (23 Points)
Replied 13 September 2017

No need to tax audit if your profit is less than zero..

MOHD AFROZ (STUDENT) (1475 Points)
Replied 13 September 2017

An assessee has business and gross receipt of business is upto Rs. 1 Crore (Except presumptive income) during the previous year, assessee will not be liable for tax audit, whether business has suffered loss in the previous year.

Dwaipayan Paul (Ca final) (1767 Points)
Replied 13 September 2017

If the assessee maintains proper books of account and it shows that he is incurring loss> NO TAX AUDIT

If no books of accounts maintained> TAX AUDIT.

SabuCS (soleproprietorship) (45 Points)
Replied 13 September 2017

If an assessee doing business or profession if his income is less than 8% of turnover or gross receipts then tax audit is compulsory. While calculating 8% if the income itself is below taxable limit tax audit is not necessary.