Tax audit Matters

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.

For any cash expenditures & cash receipts less than 5%, tax audit applicable only if turnover exceeds 10 Crs.

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%.....