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Sec 44AB Applicability

16 January 2021

If a business man having turnover less than 1cr do not opt for presumptive taxation u/s 44AD and declares profit less than 8% is tax audit applicable in this case ?

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16 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 16 January 2021

No in this case tax audit is not applicable

Kapadia Pravin (17249 Points)
Replied 16 January 2021

Tax audit is applicable on the determination of TURNOVER exceeding prescribed limit. So here Tax audit is not applicable. Books of accounts are mandatory and financial statements BS and P&L to be compulsorily prepared as it's part of ITR Form.

vishal yadav (48 Points)
Replied 16 January 2021

Tax audit is applicable if NTI exceeds basic exemption limit even if turnover is less than 1 crore and income declared less than 8% or 6% as the case may be

Krishna Chaudhary (Accountant) (4531 Points)
Replied 16 January 2021

Yes applicable

3 Like

Anjali lakra (473 Points)
Replied 16 January 2021

Yes, tax Audit is applicable.

Krishna Chaudhary (Accountant) (4531 Points)
Replied 16 January 2021

Yes audit applicable

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 16 January 2021

No he is not required for tax audit as he is not opting for 44AD

Smit Shah (524 Points)
Replied 16 January 2021

Not required if earlier also you have not opted for 44ad

ayusmita (Tax consultant) (5885 Points)
Replied 17 January 2021

In the current senerio audit applicability
the cash payment , receipts, are high than 5% of total payment or receipt then the assessee will liable for tax audit u/s 44AB (a) as per the provisions to sec 44AB(a)
the assessee has declared profits as per presumptive taxation scheme in any of the five preceding years and has not declared profits as per presumitative taxation for current year then liable for tax audit u/s 44AB(e) rws44AD
again as per the circular

the assessee shall be eligible to opted for presumptive taxation declare profit lower than 8%or 6% without taking into consideration whether he has opted for presumptive taxation for any of the assessment year prior to 2017- 18 or not again to say he would be liable for audit if he declared profits as per presumitative taxation in AY 17-18 or subsequent assessment years and has not declared profit in any of the five succeeding years in accordance with presumptive taxation
again there is many rule n regulations for different business separetly for being audit

Krishna Chaudhary (Accountant) (4531 Points)
Replied 18 January 2021

The law is mandatory not the optional.

you have to show minimum profit of 8% for your business. if you do not show minimum profit of 8%, whatever your turnover is ,you have to get audited.
so audit liability is applicable on you.
kindly don't file your ITR showing income less than 8% .otherwise you have to face assessment.

1 Like

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 18 January 2021

Not at all as you are declaring the income at 8%.

You can go through Sec 44AB for detailed clarification

Saritha.Sheregar (Articleship) (22 Points)
Replied 21 January 2021

Tax audit comes under the preview of Sec 44AB of the act .Sec 44 AB is applicable if turnover exceeds 1crore except he does not fall under Sec 44AD

Sec 44AD is applicable if assesse carries on eligible business except business of plying,hiring and leasing goods carriage whose total turnover from the business does not exceeds two crores and have declared profits at rate of 8%or 6%of the turnover then he is not required to get his books audited

If both the conditions or either of the conditions of Sec 44AD are not satisfied then Sec 44AB comes into action and tax audit becomes applicable

In the given case turnover does not exceeds 1crore as specified under sec44AB and neither presumptive taxation of Sec 44AD have been adopted

Thus tax audit is not applicable