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Applicability of 5 Crore Audit Limit

Shivaksh Somani (Student CA IPC / IPCC) (56 Points)

12 April 2021

whether limit of 5 Crore or 10 Crore of Tax Audit is applicable to Taxpayer who files return under section 44AD?

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6 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 12 April 2021

Under section 44AD, presumptive taxation turnover limit is 2 crores rupees

Shivaksh Somani (Student CA IPC / IPCC) (56 Points)
Replied 12 April 2021

If we restrict our payments and receipts to 5% then also limit is 2 crore or it is 5 crore?

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 12 April 2021

Under section 44AD, if you show Profit less than 8% of turnover then tax audit is mandatory otherwise if you show profit above 8% of turnover then tax audit is not applicable irrespective of 5% payment and receipts. As, for entites not opting for presumptive taxation under section 44AD for them 5% cash payments and receipts are applicable.

Shivaksh Somani (Student CA IPC / IPCC) (56 Points)
Replied 12 April 2021

If i show profit above 6%/8% and turnover is above 2 crore then also audit applicable?

Ankit Neema (2742 Points)
Replied 12 April 2021

Yes , audit is applicable

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 12 April 2021

Yes as turnover exceeds 2 crores rupees means you are not eligible for presumptive taxation and Normal tax provisions will apply then tax audit is applicable as turnover exceeds 1 crores rupees