Respected Sir,
If sales of the firm is less than 60 lacks & Purchase is more than 60 lcks then tax audit do or not?
Respected Sir,
If sales of the firm is less than 60 lacks & Purchase is more than 60 lcks then tax audit do or not?
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
11
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.
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