Section 44 AD

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 29 June 2011

yes audit is applicable as profit is below 8%

CA Vishal kapoor (Partner) (320 Points)
Replied 29 June 2011

Thanks Dear,

What will Happen if my sale is 19 lakh.?

Thanks

CA Vishal kapoor (Partner) (320 Points)
Replied 29 June 2011

As My income is 150000 which is Less than maximum amount no chargeable to Tax. Whether Audit is Compulsory.

& if Yes than what will happen if my Sale is 20 lakh & my profit is 160000 (8%).

Thanks

Vishal

Mayur Agrawal (Audit and Tax Practice) (657 Points)
Replied 29 June 2011

vishal your understanding is correct. you are not liable for audit in both cases. but in first case your gross total income from all sources should not be above 160000

CA Vishal kapoor (Partner) (320 Points)
Replied 29 June 2011

Thank Mayur Sir,

That means if my sale is 19 lakh with profit of RS 133000(7%). than we are not required to gets his account audited.

& please show some light on the applicability on TDS Provision if My sale is below 60 Laks.

whether TDS is applicable on next year..

Thanks

Vishal

CA Vishal kapoor (Partner) (320 Points)
Replied 29 June 2011

Sir i Think In the First Case i am not correct which is as below because my profit is 6%.

My question is that if the Firm has a annual turnover of 25 Lakh showing annual Profit of Rs 150000 (6%)

Correct me if i am Wrong

Thanks

Mayur Agrawal (Audit and Tax Practice) (657 Points)
Replied 29 June 2011

if income is below 160000 then you are not liable for audit but you have to maintain books of accounts as per 44AA. whether your turnover is 25L or 19 L .

I think Sec. 44AD not talks about TDS.

TDS provisions always be applicable.

CA Vishal kapoor (Partner) (320 Points)
Replied 30 June 2011

Thanks Mayur Sir,

Sir I think if Sec 44 AD attracts then TDS provisions not applicable because of the Following paragraph in TDS sections..

Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such commission or brokerage is credited or paid, shall be liable to deduct income-tax under this section:]

Siir It is Clearly written that if the limit of Sec 44 AB( i.e 60 Lakh) exceeds then TDS provision is Applicable.

As in our Case our Sales is below 60 lakh, then how the TDS provisions is applicable.

Correct me if my View is Wrong

Thanks

Vishal

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 30 June 2011

please read the original query " where the assessee is a FIRM" here no exemption is available, so all such provisions does not apply on assessee,

you have to get audited below 8% and there is tax from zero, TDS provision start from zero in case of firm.

1 Like

A G Vishal Kirthic (Chartered Accoutant) (236 Points)
Replied 30 June 2011

Hi Vishal,

The said firm is subject to maintenance of Books of Account as required u/s 44AA and get them audited as required u/s 44AB since the maximum exemption limit of Rs 160000 and whatever, is applicable for individuals and not for firms. Firms fall under the tax net of 30% how much ever its income may be.