INCOME TAX AUDIT

If my turnover is 5 crore in fy 2021 and all cash and receipts is less than 5% and profit is 8 lacs can I liable to tax audit
Replies (5)
Quick Summary
If your business turnover is 5 crore for FY 2021 and cash transactions are less than 5%, you are likely liable for a tax audit. This is especially true if you are not opting for presumptive taxation under Section 44AD, as the turnover exceeds the threshold for that scheme. Even with a profit of 8 lakhs, the high turnover and low cash component necessitate an audit.

If ur profit is below 8%/6% of turnover then u should be liable for audit.
Yes you are liable for tax audit
No ,If you are opting for presumptive taxation under section 44AD then you are liable for tax audit ,turnover is exceeding INR 100 Lacs ,However If you opt for regular one ,then upto 500 Lacs of ( Subject to 95% of GR/GP are in electronic mode and not in cash ) audit is not required ,if you have already opt for 44AD in PY then you can't go with 44AD for this FY 2020-2021,( It will not consider as breach of condition of claiming less than 6%/8% or loss).
If u don't opt for 44AD - presumptive tax and if ur cash receipts and payments are less than 5%, u r not liable for tax audit. Audit for Less than 8% or 6% rule applies only for 44AD people and since ur turnover is more than 2 crores u don't have option to choose 44AD.

So as long as ur ur cash receipts and payments are less than 5% of ur total receipts and payments and turnover is less than 5 crores, u r not liable for tax audit

44 AD in not for above 2 crore.

Above 5Cr with 5%or less cash transactions, Tax Audit is must, then do not think about profit %age.

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