Audit required or not?

This discussion clarifies whether a tax audit is required for a business with a turnover of ₹40 lakh and a net profit of ₹2 lakh, which is less than the presumptive taxation rates of 6% or 8%. While presumptive taxation under Section 44AD usually exempts businesses below ₹1 crore from audits, declaring profits lower than the prescribed percentage can trigger a mandatory audit under Section 44AB. The thread explores the nuances of ITR filing (ITR3 vs. ITR4S) and offers advice on how to potentially avoid an audit by declaring profits at the presumptive rate or exploring alternative options.