Tax Audit limit

Tax Audit is applicable Even the gross turnover falls below tax audit limit if net profit is less than 8% or 6% .

Books of accounts have to be maintained under section 44AB since tax audit is applicable

Audit is not required if return not filed u/s 44AD

Audit not required if your case doesn't fall under 44ad(4)

Since turnover is below 1cr and profit is below 8%. if you file itr 4 then audit is compulsory and if you file itr 3 then not required.

Can anyone please elaborate as there are different opinions

Tax audit is mandatory if the turnover is less than 8%/6% irrespective of the turnover

@ mr Eswar reddy could you please provide relevant provisions of section that substantiate your statement?

Tax Audit criteria:

Business Loss
Turnover above the limits
Net profit below 8/6%
Voluntary Tax Audit

@ Mr Eswar reddy if you please quote the relevant provisions of the section, it'll be helpful. I have gone through 44ab, but no where the points mentioned by you have been mentioned.. so pls enlighten us

Simultaneous reading of sub sections (1), (4) and (5) of Section 44AD and sub section (1) and (4) of Section 44ADA brings to light the following points:

♠ The profits of an assessee engaged in eligible business under the head ‘Profits and gains from business and profession shall be deemed to be equal to 8% or 6% or 50% of the total turnover or gross professional receipts as per the case of the asessee or such higher amount as may be claimed by the assessee.



Check this and also note that it's for AY-2020-21 .There is amendment in this section through FA-2020 which is not relevant for AY-2020-21