Turnover for the tax audit

I think regarding sec 44AB..if ur turnover doesn't exceed 60 lacs but the margin of profit exceed the....rate given...then its required....

agreee with above limit is rs 60 lakhs

Sec 44AB talks only about sales.. And in no where the purchase amount will be linked here.. Because ultimately we are trying to find the income of the business.. Which we get through sales.. And if the sales amount does not exceed 60lacs.. Then section 44AB will not attract...

Thx all of u

please provide some useful link

turnover only includes sales and other income from the business. But when your purchases are more than sales and income than you will be incurring loss and in that case audit is compulsory to claim that loss

@ surender Can you please provide the link of that guidance note

thx all of u but please provide link for this guidence note of ICAI

@ ASHISH GUPTA PURCHASE IS MORE THAN SALES IT DOSE'NT MEAN THAT FIRM IS HAVING LOSS PURCHASE IS MORE IN CASE OF WE ARE CONTAINING THE PURCHASES AS CLOSING STOCK AND THERE IS NO LOSS. 

@ gaurav kwatra thanks alot. That just skipped of my mind

Dear  Surendra Agarwal  this is what i got from Guidiance Note....if  u got anywhere in 44AB talks abt Purchase please give the link.....so that i ll update my self....thanks

5. Sales, turnover, gross receipts

The term "sales", "turnover" or "gross receipts" are

not defined in the Act, and therefore the meaning of the aforesaid terms

has to be considered for the applicability of the section.

5.2 In the “Guidance Note on Terms Used in Financial Statements”

published by the Institute, the expression “Sales Turnover” (Item 15.01) has

been defined as under :-

“The aggregate amount for which sales are effected or services

rendered by an enterprise. The term `gross turnover’ and `net

turnover’ (or `gross sales’ and `net sales’) are sometimes used to

distinguish the sales aggregate before and after deduction of returns

and trade discounts”.

5.3 The Guide to Company Audit issued by the Institute, while

discussing “sales”, states as follows: (Page 53 of 4th Edition, 1980)

“Total turnover, that is, the aggregate amount for which sales are

Tax Audit Under Section 44AB of the Income-tax Act, 1961

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effected by the company, giving the amount of sales in respect of

each class of goods dealt with by the company and indicating the

quantities of such sales for each class separately.

Note (i) The term ‘turnover’ would mean the total sales after

deducting therefrom goods returned, price adjustments, trade

discount and cancellation of bills for the period of audit, if any.

Adjustments which do not relate to turnover should not be made e.g.

writing off bad debts, royalty etc. Where excise duty is included in

turnover, the corresponding amount should be distinctly shown as a

debit item in the profit and loss account.”

Audit of accounts u/s 44AB is applicable if total sales,turnover,gross receipts as the case may be exceed 60 lakh

Hi,

The Section 44AB of the IT Act states that if the total sales, turnover or gross receipts exceed Rs 60lacs.  This means that if the purchases also exceeds Rs.60lacs then alsoTax Audit is applicable, as the Act gives the three terms Sales, Turnover or receipts seperately.  There is nothing to do with Other Income of the business.