Query on sec 44 ab

44AB applicable when :

In case of:

Business T/O exceeds Rs.1 cr

or

Profession G/R exceeds Rs.25 lacs.

or 

The Person is carrying on business or profession and is covered under the provisions of section 44AD, 44AE, 44AF, 44BB or 44BBB and claims that his income from the said business is lower than the deemed profits and gains computed under the relevant section Thus

1. In case where a person has a total turnover of Rs. 98 Lakhs and has sold a Car for Rs. 8 Lakhs. In such a case, the total amount on adding up becomes Rs. 1.06 Lakhs i.e. above Rs. 1 Crore. Confusion arose whether the person is liable to get an audit done in this case and ICAI has clarified that the turnover will not include any amount on the sale of the fixed asset as it was held by the person for business use and not for the purpose of sale.

ICAI has further clarified that the amount received from the following items shall not be included while computing the Total Sales/Total Turnover/ Gross Receipts:-

• Sale Proceeds of Fixed Assets
• Sale Proceeds of Assets held as Investments
• Rental Income
• Income by way of Interest unless assessable as Business Income
• Any expense which is reimbursable to the Agent by the Client

Tax audit not required in your case as the turnover is below the threshold limit of Rs. 1 crore for business and Rs. 25 Lakhs for profession.

Hiring cameras not fall under profession.

Tax audit is not required as the gross receipts is less than rs. 1 crore.

Check the applicability of presumptive provisions such as 44AF etc. as suggested by Mr. Bhavesh. In case applicable, you need to offer minimum deemed profits to tax, else tax audit is applicable