Audit report for loss returns

ITR 128 views 7 replies

A reading of section 44AB and section 44AD does not necessitate audit in all cases where loss is declared. Audit needs to be done only if turnover exceed specified limit or for those who had earlier chosen 44AD (under certain circumstances).

Don't think audit is required for first time filers of business loss even if their total income is above exemption limit.

However, ITR is showing validation error that audit report has not been filed for loss cases. Is anyone else also facing this. What is the solution? 

Replies (7)

A reading of section 44AB and section 44AD does not necessitate audit in all cases where loss is declared. Audit needs to be done only if turnover exceed specified limit or for those who had earlier chosen 44AD (under certain circumstances). Don't think audit is required for first time filers of business loss even if their total income is above exemption limit.

However, ITR is showing validation error that audit report has not been filed for loss cases. Is anyone else also facing this. What is the solution? 

Can anyone please revert on above query..

Sec 44AD. (1) Notwithstanding anything to the contrary contained in section 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession" :

Note: Eligible Assessee   Eligible Business       Deemed Profit....  &     Notwithstanding anything to the contrary ....

If all of these conditions fulfilled ...  section 44AD(4) doesn't apply; otherwise for deemed profit less than 6/8% it automatically gets attracted.

In short, either declare deemed profit or get accounts audited..

Thanks for the response. However, kindly refer to sec 44AD(4) as well, which necessitates the audit only if the assessee has already declared profit u/s 44AD earlier. Nothing has been mentioned, if he has not done so earlier (eg first time filers of loss).  

I have referred both the Sub-sections, the wordings are tricky, but applicable from first year itself, because of word 'DEEMED' profit.

In protest against ADMIN for its discriminatory behavior among different members, I leave the portal permanently.  Good Bye.  

Do we have any other views on this as I strongly believe audit is not compulsory after considering amendments done in 2016 to section 44AB and 44AD.


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