Applicability of Tax Audit

Dear Friends

A person carries on the business of recharging prepaid mobile phones and distributing SIM Cards.

He sells recharge card of about Rs.4-5 lakhs per month, from which he gets 1% margin/commission.. 

Now i know that commission is the basis for determining 40 lakhs turnover for tax audit, but there is a problem.

 

The mobile phone company is deducting TDS on the entire value of SIM card distributed by him. So should we take the amount received by him as the turnover of his business

If that is the case then his tunover will exceed the limit prescribed U/s 44AB.

Please give your expert opinion

Urgent!

 

Thanks in advance

Replies (4)

According to my opinion your recharge card sales is your turnover.

The 1% commission you earn is your one type of profit

Hello Mr Gopal krishnan

as per Sec 44AB the turnover is the basis for Tax audit not profit so 4-5 lacs of sale of sim cards shud be basis for tax audit applicability.so u r liable for tyax audit. 

 

your turnover for 44AB : commission on recharge card sales + sale value of sim card ( new connection )

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