TDS APPLICABILITY ON FIRST TIME AUDIT CASE

This discussion clarifies the applicability of Tax Deducted at Source (TDS) for a business that falls under tax audit (Section 44AB) for the first time in FY 2020-21, having had a turnover of ₹2.56 crore. The previous year's turnover (FY 2019-20) was only ₹40 lakhs, under Section 44AD. Experts advise that TDS deduction obligations typically commence from the financial year following the first audit, meaning TDS should be deducted from FY 2021-22 onwards in this specific case.