Tds requirement

With due respect to the opinions posted by members here, i would like to differ on the matter.

 

Section 44AB of the Income tax Act makes it obligatory for every person carrying on business to get his accounts of any previous year audited if his total sales, turnover or gross receipts exceed one crore rupees. However, if an eligible person opts for presumptive taxation scheme as per section 44AD(1) of the Act, he shall not be required to get his accounts audited if the total turnover or gross receipts of the relevant previous year does not exceed two crore rupees. The higher threshold for non-audit of accounts has been given only to assessees opting for presumptive taxation scheme under section 44AD.

 

I would also like to quote section 194A in bare act language so it can be open for proper interpretation.

 

"Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force.

 

Provided that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under this section."

 

Hence Section 44AD only specifies that if turnover is below 2 crores and assessee is opting for presumptive taxation, audit u/s 44AB will not be required. However TDS Section 194A makes clear reference to turnover limit specified in 44AB for its applicability. Since turnover limit u/s 44AB is still 1 crore, TDS deduction will be required if turnover exceeds 1 crore.