Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Ceiling Limit on Specified Number of Tax Audits by CA

1494 views

Save Share

amol bramhankar

artical tranee

277 Points Posted on 01 September 2022

WHAT WILL BE TURNOVER
LIMIT FOR 44AD audit excluding in celling limit? 2 CRORE OR 1 CRORE? AS UPTO 2 CRORE ASSESSEE CAN TAKE BENEFIT OF 44AD.

Replies (7)

Quick Summary

This discussion clarifies the turnover threshold for tax audits under Section 44AD of the Income Tax Act. It explains that if an assessee opts for the presumptive taxation scheme under Section 44AD, with a turnover up to 2 crore, and declares profit at 8% or 6%, it's generally not counted towards the overall limit of 60 tax audits for a Chartered Accountant. However, if the audit is conducted under Section 44AB(a) (even with turnover between 1-2 crore), it is included in the ceiling.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212444 Points Posted on 02 September 2022

Assessee can take benefit of 2 Cr u/s. 44AD of IT act...

Secondly, the reason why 44AD etc is not included in number of Tax Audits… may be because the Assessee has an option to avoid the Audit by declaring 8/6% on turnover as profit. Since this option is extended for a turnover upto 2 Crores, on the same logic, such audits not become part of the ceiling.

amol bramhankar

artical tranee

277 Points Posted on 02 September 2022

In audit report 3cb clause 8 if options take if turnover between 1 to 2 cr
a or e

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212444 Points Posted on 02 September 2022

If Sec. 44AD (4) & (5) were applicable to assessee, select option 44AB(e); otherwise sec. 44AB(a) of the act.

amol bramhankar

artical tranee

277 Points Posted on 02 September 2022

Revised Guidance Note on Tax Audit if turnover above 1 crore select option ( a) if (a) selected it's considered audit under 44AB (a) and is considered in celling limit due to guidance note more confused

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212444 Points Posted on 03 September 2022

Yes, if audit is done as per sec. 44AB(a), and the same is counted under overall limit of 60.

But when the audit is done as per sec. 44AB(e), as required/ directed by sec. 44AD(4) r.w.s. 44AD(5), the same will not be calculated u/s. 44AB(a), even if the turnover is above 1 cr. but below 2 crs. & as such it will not be included in overall limit of 60.