Tax Audit


Ramesh (Director)     21 September 2019

Ramesh
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Hello

This query is relating to applicability of Tax Audit (44AB) for a Private Limited company. A private limited company is carrying on activity of accounting, bookkeeping and tax return preparation etc for overseas clients. Company or its directors are not doing any certification work on behalf of the company for is clients. The question is whether the activity of this company is termed as carrying on business or profession? Can a company ever carry on profession as it is an artificial person? If yes what activities are termed as profession?

In this case Company's Turnover for 2018-19 Financial year is above Rs.50 laks but less than Rs. 1 crore. Is this company need to gets its accounts audited u/s 44AB of Income Tax Act?

Thanks, Ramesh

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LAXMIDHAR SAHOO (ARTICLES)     21 September 2019

LAXMIDHAR SAHOO
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Providing accounting service is coming under specific profession under IT act 1961, and a company can provide such accounting service..

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Gunasekhar (Student CA IPC / IPCC)     21 September 2019

Gunasekhar
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Incase it is profession Gross receipts exceeding 50laksh then audit compulsory under 44AB

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LAXMIDHAR SAHOO (ARTICLES)     21 September 2019

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And. for tax audit purpose turnover is 1 crore..

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Gunasekhar (Student CA IPC / IPCC)     21 September 2019

Gunasekhar
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For profession the limit is only 50laksh right, it is not 1crore

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LAXMIDHAR SAHOO (ARTICLES)     21 September 2019

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Yes exactly. for profession 50 lakhs and for business 1 crore to be consider

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Suresh Thiyagarajan (Student)     21 September 2019

Suresh Thiyagarajan
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1. There is nothing contrary for a company to carry on a profession. Typically it is a firm which normally carries on profession business. But there is nothing wrong in doing accounting, bookkeeping services, etc. 
2. If a company is carrying on profession then limit of Rs. 50 lakhs will be applicable and tax audit is mandatory in that case. 
3. In your case since your T.O is above Rs. 50 lakhs, a tax audit is mandatory u/s 44AB. 
Please correct me if the above solution has an alternative view. 

debora M (BUSINESS DEVELOPMENT MANAGER)     09 October 2019

debora M
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for professional tax the limit is 50lakhs and for business it is 1 crore


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