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Tax Audit limit for Proprietorship Business

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Sanket

13 Points Posted on 30 December 2021

For a proprietorship business, employing 15 people, building software as per client requirement, what is the limit for getting Tax audit done?

All transactions are digital.

Can someone please guide me?

Thanks in advance.

Replies (4)

Quick Summary

This discussion clarifies the tax audit requirements for a proprietorship software development business. While generally a 10 crore turnover triggers an audit, software development is classified as a profession. Therefore, if gross receipts exceed 50 lakh rupees, a tax audit under Section 44AB(b) becomes mandatory for such firms.

CA Aakarsh Jain

10436 Points Posted on 30 December 2021

Above 10 crore turnover audit is required

Sanket

13 Points Posted on 30 December 2021

Thank you Sir,

However I am being told, that software development is a Profession, and it is a proprietorship firm, so the limit of 50 Lakh of Professionals will be applicable for Tax Audit. Is that right? or it should be 10 crores only.