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Tax audit applicability in case of loss making pvt ltd company, turnover less than 1crore

29 November 2016

If the turnover is less than 1 crore of a PLC, and is loss making, would he still be liable to tax audit ? which section you may please specify.

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3 Replies

Rahul Mishra (studying) (34 Points)
Replied 29 November 2016

i agree wid u pallav sir, as u correctly defined the word eligible assessee,as per provisions contained in income tax act as far as my knowledge concern there is nothing mention especially about applicability of tax audit of private company having turnover less than 1 cr and such co are also loss making however as per practice followed in practical life tax audit is not required of such company.

thank u pallav sir for correcting my view with regard to eligible assessee.

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CA Pallav Singhania (IT System Auditor) (33262 Points)
Replied 29 November 2016

The provisions of section 44AD are applicable to such resident assesses who is an Individual, Hindu Undivided Family and Partnership Firm but not Limited Liability Partnership Firm. Unlike section 44AE, in case of section 44AD there is a restriction on which categories of assessees can opt for the scheme. Only specific categories of resident assessees as discussed above can opt for this scheme.

In this case, even though if the company satisfies all the criteria for adopting the provisions of section 44AD, it cannot opt for presumptive taxation schemes of section 44AD since these provisions cannot be adopted by an assessees being a private limited company. In other words, the presumptive taxation scheme of section 44AD can be adopted only by a resident assessees who is an Individual, 11indu Undivided Family and Partnership Firm (not Limited Liability Partnership Firm).