Section 44ab of it act 1961

No. Service tax is not a part of turnover / gross receipts..

Refer to guidance note on tax audit

https://caclub.in/wp-content/uploads/Guidance-Note-on-Tax-Audit-under-section-44AB-of-the-Income-Tax-Act-1961-by-ICAI-Edition-2014.pdf

[2014 Edition]

Sec 44AB:- Audit Of Accounts Of Certain Persons Carrying On Business Or Profession

• Audit of accounts is compulsory

   

   

   

  • In case of Business: – If Total Sales/ Gross Turnover exceeds Rs 1 Crore in any previous Year
  • In case of Profession: – If Gross Receipts exceeds Rs 25 Lakh in any previous Year
  • Assessees covered u/s 44AD/44AF/44BB/44BBB are also required to audit of accounts if they claim that their profit will be less than limit specified in respective section. e.g. u/s 44 AD Audit of accounts is required when two conditions are satisfied:-

     

     

     

    1. Claim lower profit than limit specified u/s 44AD (Limit of 8%)
    2. Total Income exceed basic exemption limit.
• For calculation of turnover u/s 44AB, the turnover u/s 44AD/44AE shall be excluded.
• Above limit is assessee wise and not business /profession wise e.g. If assessee has two business than turnover will be summed up.
• Audit Date:-

   

   

   

  • Normally 30th September.
  • In case, if assessee has International transactions, 30th November.
• Audit Report Form:- 3CA if audit required under any other law
  3CB if not covered above means covered under Income Tax.
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