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6 criteria of 44AD

Bhavika Tourani (Student) (159 Points)

10 August 2021

what if turnover is 1.5 cr and if suppose out of that amount 70 to 80 lakhs is received through banking channel can we show that sale in 6% profit

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8 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 10 August 2021

Yes you can show 6% profit on banking channel turnover

Bhavika Tourani (Student) (159 Points)
Replied 10 August 2021

Is there any provision regarding 5% in this case?

CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 10 August 2021

No I think there is no 5% case

CA ABHAY GUPTA (Practice) (3235 Points)
Replied 10 August 2021

Under section 44AD there is two rate of deemed profit 6% if receipt through banking channel and 8% in rest cases.
There is 5% provision in case turnover in excess of 2 crore and less than 5 crore then no need to get accounts audited if the receipt and payment is not in excess of 5% of total receipt.

CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 15 August 2021

Thanks for the information

Nidhi (Chief Accountant) (3150 Points)
Replied 17 August 2021

If your receipt and payment in cash is less than 5% of total receipt and payment during the year, than not required to get books of accounts audited up to limit of Rs. 10Cr.

Bhavika Tourani (Student) (159 Points)
Replied 17 August 2021

That limit is only for audit purpose ? and if out of 100% sale 60% is received in bank so that will be ok na or entire 100% should be through bank for 6% case .....i m confused regarding this point

Nidhi (Chief Accountant) (3150 Points)
Replied 17 August 2021

Yes, that 5% limit is for audit purpose..
if your 60% sale in bank and other in cash than ..to u audit limit of Rs. 2 cr is applicable.

you can show 6% on sale amount received in bank and 8% in cash as a profit u/s 44AD