LLP performing IT services business or profession for tax audit 44ab

We have one llp whose turnover is 95 Lakhs, if we consider it business then tax audit is not applicable but if its profession then tax audit is required,

My question is whether same can be considered as business receipt and avail benefit of increase threshhold of 10CR

Replies (7)
Quick Summary
This discussion explores whether an LLP providing IT services with a turnover of £95 Lakhs should be classified as a business or profession for tax audit purposes. While IT services are often considered a profession, the LLP structure and partner remuneration (salary and profit share) complicate the classification. The key takeaway is that regardless of classification, an LLP is not eligible for presumptive taxation under sections 44AD or 44ADA, meaning the tax audit threshold remains £10 Crore (assuming minimal cash transactions).

Yes, it can be business for LLP, provided none of the partner is professional...

One of the partner is software engineer 

Does he charge professional fees to LLP?

He takes salary and share in profit

According to ITR Form 4/5 IT services are covered in Profession 

As he takes salary & shares in the profit as per LLP deed, the business activity of LLP will fall under Profession, though its disputable issue.

44AD and 44ADA both are not applicable to a LLP thus applicable turnover threshold to determine tax audit applicability is 10Cr. (assuming less than 5% cash transactions)

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