I am in work contract service.
my turnover is below 2 crore. please tell me income tax audit is applicable on me or not?
Tax audit limit for contractors
Replies (3)
Quick Summary
1. If the aggregate of all amounts received and Payment in cash, does not exceed 5% of the Turnover - Tax Audit Not Applicable
2. If The above condition is not satisfied and you are eligible for the presumption taxation scheme - Tax Audit Not Applicable
2. If The above condition is not satisfied and you are eligible for the presumption taxation scheme - Tax Audit Not Applicable
If you are declaring 8% profit, not required. if not, then required
Depends on presumptive or regular:
• If you opt for Sec 44AD (works contract is a business, eligible) and declare at least 6%/8% of turnover: no audit up to Rs 2 crore (or Rs 3 crore if cash receipts are 5% or less).
• If you don't opt for 44AD: audit only if turnover exceeds Rs 1 crore, or Rs 10 crore where cash receipts and payments are each 5% or less (Sec 44AB(a)).
• If you opted out of 44AD in any of the last 5 years after opting in, and declare lower profit with income above the exemption limit: audit under 44AB(e).
• So with turnover below Rs 2 crore, declaring 6%/8% or more under 44AD, no audit is needed.
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