SECTION 44AD AND COMPULSORY TAX AUDIT

Tax queries 233 views 10 replies

mitesh shah

manager-Finance

24 Points Joined March 2015

I AM WORKING AT SOLE PROPRITORSHIP FIRM.

WE HAVE FILED IT RETURN U/S 44 AD, IN FINANCIAL YEAR:2021-22[6% OF TURNOVER]

BUT IN THE FINANCIAL YEAR:2021-22, WE WANT TO DECLARE THE PROFIT LESS THAN 6% OF TURNOVER AND TURNOVER IS MORE THAN 1 CRORES BUT LESS THAN 2 CRORES.

IN THIS CASE IS IT NECESSARY /ESEENTAIL TO GET BOOKS OF A/CS AUDITED?

I UNDERSTAND THAT THE RECENT AUDIT TURNOVER LIMIT IS 10 CRORES[WITH LESS THAN 5% RECIPT /PAYMENTS ARE THROUGH MODE OTHER THAN DIGITAL MODE.

I REQUEST CLARIFICATION BY EXPERTS IN THIS MATTER.

REGARDS & THANKS.

FROM:MITESH SHAH]

Replies (10)

Karan Prajapati

170 Points Joined December 2020

Yess, you have to get your books of account audited and for the next 5 years you are eligible to opt for Presumptive.

JJJ

Need help

680 Points Joined November 2021

That 10 crore limit does not apply to presumptive tax.

So if you want to declare less than 6% profit, then a tax audit will be needed.

It might be less expensive / painful to just go with the 6%. Compare your increased tax (on 6% vs what you actually have) with the time and cost of maintaining your accounts, paying for a tax audit, correcting entries where needed and saving records.

Eswar Reddy S

CFO- at NHTF

58280 Points Joined August 2012

@ Mitesh Shah,

If all receipts are by online or account Payee modes then you may declare 6% profit u/s 44AD

Audit is not required in this case since your turnover is less than 2 Crores