Suppose Mr. A turnover below 1 crore in section 44AD.
But this year, in books of accounts, there profit is coming less than 6%.
Can they still show profit of more than 6% in ITR & escape from Tax audit?
Profit exceeds Maximum amount of income not chargeable to tax.
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Applicability of tax audit.
Replies (10)
Quick Summary
In my view, if you are showing minimum 6%/8% profit of turnover then Audit is not required. Even if you have lower profit in Books and you decide to declare minimum 6/8% then no audit required.
Tax paid by the assessee under Section 44AD is calculated at 8% of the individual's gross turnover for the financial year, provided that his or her gross turnover is below Rs 1 crore. This limit has been raised to Rs 2 crore as per the Budget 2020.
Yes if profit is showing greater than 6% of turnover then tax audit should be escaped
8% or more
The Income-tax Law requires the taxpayer to get the audit of the accounts of his business/profession from the view point of Income-tax Law. A person carrying on business, if his total sales, turnover or gross receipts (as the case may be) in business for the year exceed or exceeds Rs. 1 crore.
In budget 2020 this 1 crore limit increased to Rs. 2 Crores
Yes. Mr.A can show a profit of 6%/8% and can skip tax audit.
Only 8%
Why 8%, when in 44AD option given to declare 6% profit on the turnover which is other than cash and 8% in case of turnover is through cash
Yes. Mr.A can show a profit of 6%/8% as the case may be u/s 44AD and escape the tax audit u/s 44AB
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