APPLICABLE TAX AUDIT ( U/S 44AD & 44AF)

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Originally posted by : SUNIL SINGH
	Originally posted by : SUNIL SINGH PLS REPLY :- APPLICABLE TAX AUDIT MORE THAN & LESS THAN 40 LACS TURNOVER/RECEIPTS UNDER U/S 44AD & 44AF

APPLICABILITY:

SEC 44AD(CIVIL CONSTRUCTION) : IF THE GROSS RECEIPTS FROM BUSINESS DOES NOT EXCEED RS. 40 LAKHS IN THE PREVIOUS YEAR.

SEC 44AF(RETAIL BUSINESS:IF THE GROSS RECEIPTS FROM BUSINESS DOES NOT EXCEED RS. 40 LAKHS IN THE PREVIOUS YEAR.

MEANING OF GROSS RECEIPTS 4 THESE SECTIONS: 

THE WORD TURNOVER 4 THIS SECTIONS IS NOT DEFINED IN ACT. IT INCLUDES SALES OF SCRAPS AND EMPTIES, SALES TAX AND OTHER LEVIES, TURNOVER HAS TOBE REDUCED BY SALES RETURN AND TRADE DISCOUNTS. TURNOVER DOES NOT INCLUDE SALE OF FIXED ASSETS, INTEREST INCOME AND CASH DISCOUNTS.

REGARDS.....

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hi dear , Let me know that if turnover for A.Y.2010-11 is Rs.200000 only in retail trading business and Net profit is less than 8 % than Tax audit is cumpulsory ? Though It is costly for such small business to get a/c audited

I am asking regarding 44AF and recent year amendment, Please clerify me

Dear Krishna,

You have an option either to show income @ 8% which equals Rs. 16,000/- only or go for tax audit u/s 44AB.

As u mentioned the it is costly for small business to get audited then i would suggest that u should show income of Rs. 16,000 as deemed income for the year u/s 44AD and file the return accordingly.

Moreover so as even if you are in the highest tax bracket as per Income Tax slab rates of 30.9% (including cess) due to income from other heads then the effectively u pay only Rs. 4,944/- as income tax. However if you go for tax audit the moinimum fees a CA would charge would be atleast Rs. 7,500/-. That would be the least. So it is better to show the income as deemed income as it is beneficial though the real income is less than that.

IF SALE IS BELOW 40 LAKHS 44AD IS APPLICABLE