Dear Chartered Accountants,
In tax audit they tells 8% 5% 6% determine of Profits....How to apply ??could you please give me an some examples....
% means of turnover ??
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Tax audit Matters
Replies (7)
Yes, % means percentage of turnover to arrive at profit margin in case of sec. 44AD
For its detail working refer:::
https://www.caclubindia.com/forum/-which-percentage-use-591290.asp
Similarly for specified professionals it is 50% of total receipts.
Now, sec. 44AB specifies limit for tax audit in case of business as 1 Cr. or 10Crs.
If the cash receipts & payments are less than 5% of total receipts/ payments, then the limit is 10 Crs., otherwise it is just 1 Cr.
Less than 5 % means sir ???
For any cash expenditures & cash receipts less than 5%, tax audit applicable only if turnover exceeds 10 Crs.
For Example My turnover Rs 2 crore so 2 crore @ 5%= 10 lakhs can I show 5 lakh ?? this is eligible for 5% ..
my question is everybody tells less than 5 % but I need some examples
my question is everybody tells less than 5 % but I need some examples
5% is only for tax audit applicability.
Do not get confused over its profit margin.......
when sec 44AD is applied....... ( applicable only if maximum turnover upto 2 Crs)
On cash turnover minimum 8% is profit margin &
over bank transactions/turnover minimum is 6%.....
This 5% is only on eligibility criteria not to show anywhere. as per your example if cash transaction were taken below 10 lac, tax audit applicable only if turnover exceeds 10 Crs.
@ Thank you Soo much chaithra Mam
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