F.y 20-21 audit limit

Page no : 3

jigar brahmbhatt (wizardd) (9 Points)
Replied 06 April 2021

AS per section 44 AD of income tax act, if there is income which is lower than 6% of turnover in case all transaction through banking channels or less than 8 % of turnover in any other case, then he has to required prepare books of accounts and audit it.irrespective of turnover. here your turnover is 90 lacs and profit is @ 5% declaring then you need to get books of account audit compulsary.

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Sachin Bhutani (2 Points)
Replied 06 April 2021

If you are maintaining complete books of accounts and have not filed return under section 44AD FOR last 3 years then file ITR FORM3 without tax Audit. otherwise you have option to file itr under section 44AD without audit declaring income @ 6% or 8% as mentioned in various replies above.

Adi Yogi (GOD) (3 Points)
Replied 06 April 2021

I would suggest you to bifurcate your income as received in cash and bank. then calculate
6% on banking transactions
8% on cash transactions

if you show 5L then that's lower than above percentage hence audit shall be applicable. to avoid audit you can go for 44AD(6/8%) and avoid audit.

Shiva kumar Amaresan (2 Points)
Replied 06 April 2021

If you have not opted to file returns under 44AD during the previous financial year then no audit is required.

Saurabh Srivastava (2 Points)
Replied 06 April 2021

Profit declare 6% no needs for audit

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Devin Taunk (22 Points)
Replied 06 April 2021

In your case you are not required for audit as per turnover clause 44AB as limit is 1cr. but your profit is less than 44AD Limit which is 8% so you are required for audit.

Krisshna Prabu (2 Points)
Replied 06 April 2021

Audit not required your case upto the turnover of 5cr.

VIPUL DHAMIJA (104 Points)
Replied 06 April 2021

You don't need to have your books audited if you are declaring income more than 6% or 8%. there is one more condition which says, if in any previous year you opted for 44AD, and you opt out from 44AD in preceding previous years, then you need to get your books of accounts audited for next 5 previous years immediately preceding the previous year in which you opt out from 44AD. simple language me bola jaye to, agr apne AY 2020-21 me 44AD opt kiya tha or abi apka profit 8%/6% se km hai, to apko AY 2021-22, AY 2022-23, AY 2023-24, AY 2024-25 and AY 2025-26 me audit krvani compulsary hai as per 44AD(e). if in case, you have any query, feel free to contact us. Write us on cavipuldhamija @ gmail.com.

KANIKA KINGER (CA ARTICLE) (2 Points)
Replied 06 April 2021

Yes in ur case it is mandatory as u r showing 5% income

Mukesh Sharma (6 Points)
Replied 06 April 2021

As per Section 44AD of the income tax Act that if Net Profit is less than 6% of turnover in case of turnover going through banking channels or if Net profit is less than 8% of turnover in any other case of banking channel than books of account should berequired U/S 44AA and gets the books audited .

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Mukesh Sharma (6 Points)
Replied 06 April 2021

kalyan (income tax executive) (32 Points)
Replied 06 April 2021

Audit not required in case of turnover less than 1 crore and declaring profit..

VowStudent (Sfnwwj) (22 Points)
Replied 06 April 2021

First of all, is it safe to claim benefit of section 44AD.

```Do all traders generally take benefit of 44AD?```

Because if you do not continuously disclose income u/s 44AD for five years, the trader can not again take benefit u/s 44AD for next five years