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Audit Of Loss in Normal Business

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Ashutosh kumar Singh

Student

73 Points Posted on 10 February 2021

my query is if turnover of business is 12.5 lac and loss is 50k then is it compulsory to go for tax audit if not opting the provision of 44AD and showing loss normally maintaining all books of Accounts
As a plain Reading of 44AB is says audit is applicable only to those who fall under sub sec 4 of 44AD and these are those person who earlier opted the 44AD and the showing Normal business income in any of 5 succeeding AY

Replies (3)

Quick Summary

This discussion clarifies tax audit requirements for businesses with a turnover of £1.25m and a loss of £50k, when not opting for Section 44AD. The general threshold for mandatory tax audits has increased to £10m turnover. If you are not opting for Section 44AD and your turnover is below this limit, a tax audit is not compulsory, even if you are showing a loss. However, if you were previously under Section 44AD and are now declaring a loss, an audit might be required unless specific conditions are met.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 11 February 2021

Normally tax audit from this FY has been increased to
10 crores rupees in a financial year and for 44AD if turnover excess 2 crores rupees and profit is less than 8% of turnover then tax audit is applicable.
In your case as your Turnover is less than
10 crores rupees and not opting 44AD so tax audit is not applicable

Kapadia Pravin

17269 Points Posted on 11 February 2021

If you continue 44AD then tax audit will be required as you are declaring loss. However, when book of account are maintained , there is no issue of tax audit as turnover limits are applicable. Turnover limit has been hiked to 10 crores from 01-04-2021.