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Tax audit u/s 44ab

shambhavi (PCC student) (34 Points)

25 July 2013

whether Tax Audit u/s 44AB once applicable to an individual for exceeding the limits for business turnover in one year, would the individual be required to file tax audit report in next year as well if the business turnover does not exceed the limits in that year?

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6 Replies

Ganeshbabu K (Audit and Tax Advisory) (48559 Points)
Replied 25 July 2013

Not required..

if assesse not crossed taxaudit limit turnover in previous year(means for A>Y.13-14 previous year is F.Y.12-13)..

Assesse not required to get his books audited

PSPSPS (Practicing) (1344 Points)
Replied 25 July 2013

No Tax Audit is an Audit for compliances Under the Income tax Act. & where the Criteria's of T/o are not exceeded, The relevant Section 44AB would not get activated & applicable thereby & Thereon., It is based on Year to year Basis.

(Guest)

1.A Person carrying on business is required to get his books of account compulsorily audited u/s 44AB If thetotal sales, turnover or gross receipt in business for the previous year relevant to assessment year exceed or exceeds Rs. 60 Lakh for the Assessment year 2011-12 and 2012-13 (Rs. 1 Crore from the assessment year 2013-14).

2. A person carrying on profession is required to get his books of account compulsorily audited u/s 44AB, if his gross receipts in profession for the previous year relevant to the assessment year exceeds 15 lakh for the assessment year 2011-12 and 2012-13 (Rs. 25 lakh from the assessment year 2013-14).

Quantum of Penalty for failure to get accounts audited within due date: If any person fails to get his accounts audited as required under the provisions of section 44AB before the due date u/s 139(1), the AO may impose penalty which may be a sum equal to one-half percent of the total sales, turnover or gross receipts subject to a maximum of Rs. 1.5 Lakh.

Section 44AB applicable to only business Income: Section 44AB provisions are applicable only in the case of business/profession income. It is not applicable in respect of other incomes.

shambhavi (PCC student) (34 Points)
Replied 27 July 2013

thank u all...

vikram singh (Student MBA) (34 Points)
Replied 28 July 2013

Plz suggest if section 44 AD is applicable for me. In financial year 2012-2013, I started software development services with a US based company (contract between Myself and US based Company) and hired 6 people to run the business. . Plz confirm that this does not come under profession of 44AA(1) and so I can file under 44AD?

parth sheth (Rajkot) (22 Points)
Replied 16 September 2016

The words used in the Act are,

Every person,—

(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in "any previous" year; or

(b) carrying on profession shall, if his gross receipts in profession exceed 14[twenty-five] lakh rupees in "any previous" year;

So why Tax Audit will not be applicable in subsequent previous years when the turnover from business falls below Rs one crore; or gross receipts from profession falls below Rs twenty five lakhs ?