Is Audit compulsory if proft is below 8%?????

391 views 6 replies

ADNAN HUSSAIN

Student CA IPC / IPCC

157 Points Posted on 18 April 2020

Hello,

There is a Partnership Firm.... for financial year 2017-18 we have filed income tax return in ITR form 5.

I have filed under No Accounts books case as turnover was 16 lakhs only where i have entered

Gross Receipts, Gross Profit, Expenses and Net profit.

And the profit shown was less than 1%. The ITR has been processed.

So my query is:-

1. Will it cause any issue, however the return has been processed.

2. Now for Financial year 2018-19 when im filing return and entering all P&L, Balance sheet details and proft is 2% and the turnover is approx 30 lakhs, will i be liable for tax audit? or can i file normally with P&L, balance sheet.

Thanks

Replies (6)

nimesh raval

10 Points Posted on 18 April 2020

Yes' you have liable for tax audit if you have income offered below 8%u/s 44ad.

ADNAN HUSSAIN

Student CA IPC / IPCC

157 Points Posted on 18 April 2020

No, I have not applied for sec 44AD, i have filed ITR 5, in that filled no accounts case

CA Naveen Chand

Chartered Accountant

12739 Points Posted on 19 April 2020

if you not provided details of Financials then you need to get your account audited

ADNAN HUSSAIN

Student CA IPC / IPCC

157 Points Posted on 19 April 2020

2017-18 ITR has been processed... Now what?

CA PRAMOD CHADA

QUALIFIED CA. CS FINALIST

139 Points Posted on 19 April 2020

Mr. Adnan,

As per 44AD , you have to get the books audited if

1) profit claimed is less than 8% or 6%

2) GTO/GR less than ₹1Cr.

So your perception of filing return for no books is OK but you have to show the income as 8% atleast. However, if you show 8% also there won't be any tax as ₹30L * 8% gives to ₹2.4L. So don't worry. If possible revise return by showing 8/6% or else just leave it as can't do anything. But don't panic.

Also for processed return, as I have seen from your comment, ₹16L is a minor amount and possibility of scrutiny is low. If luck is not with you, you may get a notice. But that's ok. We can file a revised return if possible at that time. As it is AY 1718 check whether due date for revised return is extended so that you can file a revised. Or else leave it.