Audit

HELLO FRIENDS, CAN ANYBODY TELL ME IF THER PERSON SALES ARE 40,00,000 AND HIS GP IS 5%

HE IS LIABLE FOR AUDIT U/S 44AD BUT IN P/L A/C THEY SHOWS SOME INDIRECT INCOMES AND NET PROFIT GOES MORE THAN 8%.

NOW PLS. TELL ME WHETHER THEY FALL UNDER THE AUDT U/ S44 AD OR NOT.

PLS. HELP ME.

THANKS.

Replies (3)

As per Sec 44AD, if the assessee is not subjected to tax audit, then he can claim income on presumptive basis @ 8% of his total sales or a higher income than 8% .  Other incomes shud not be considered.

Tax Audit will be appliocable if the following condition is satisfied

Every Person [(d)  carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,]

BUT IN P/L A/C THEY SHOW INCOME RELATED TO BUSINESS ONLY.

EVEN THEN ALSO AUDIT IS APPLICABLE OR NOT.

THANKS.

basically direct incomes should be considered

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