Turnover below 10 crores Cash Receipts or Payments below 5% of the total transactions

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Sangeeth Kumar

Tax Consultant

26 Points Joined November 2024

Hello Friends,

Tax Audit under Sec.44AB applicable or not?

For the following

Partnership Firm Started on October 2024

Wholesale Trading Business – Business Code - 18009

FY 2024-25 Turnover – Rs.2 crores

Net Profit – Rs.4 Lakhs

Cash payments or receipts below 5% of the total transactions i.e., cash receipts do not exceed 5% of the total receipts and cash payments do not exceed 5% of the total payments.

Can I file Business Income as Ordinary by considering the

“A taxpayer is required to have a tax audit carried out if the turnover or gross receipts of business exceed Rs 1 crore in a financial year or Rs 10 crore in case cash transactions do not exceed 5% of the total transactions (i.e., Cash receipts/payments does not exceed 5% of the total receipts/total payments)”

If anyone filed ITR, without Tax Audit as above.

Kindly comment regarding this.

Thanks in advance.

Replies (2)

Krishnan V

Chartered Accountant

28 Points Joined September 2022

Hi please proceed in the following manner -

a2i. If No , Whether during the year Total sales/turnover/gross receipts of business is between Rs. 1 crores and Rs. 10 crores? - Select Yes

a2ii. If Yes is selected at a2i, whether aggregate of all amounts received including amount received for sales, turnover or gross receipts or on capital account like capital contributions, loans etc. during the previous year, in cash & non-a/c payee cheque/DD, does not exceed five per cent of said amount - Select yes

a2iii. If yes is selected at a2i, whether aggregate of all payments made including amount incurred for expenditure or on capital account such as asset acquisition, repayment of loan etc. in cash & non-a/c payee cheque/DD, during the previous year does not exceed five per cent of the said payment ? - Select yes

b. Are you liable for audit under section 44AB? * - Select No