U/s 44AB

Tax queries 643 views 7 replies

If an interior Decorator earns 8 lac per annum as professional inocme and 35 lac as business income(trading in material for construction). Please suggest whether that individual falls under 44AB tax audit?

Replies (7)

Friend,

Pls refer Bajrang Oil Mills v. ITO (2007) 163 Taxmann 154 (Raj) 

As per Sec. 44AB of I.T. Act :

For a person carrying on business : If the total sales, turnover or gross receipt in business for the previous year(s) relevant to the assessment year exceed or exceeds Rs. 40 Lakh and not the income.

For a person carrying on profession: If his gross receipts in profession for the previous year(s) relevant to the assessment year exceeds Rs. 10 lakh and not the income..

So, please consider the turnover for ascertainment of getting accounts audited on compulsory basis U/s 44AB.

Originally posted by :Þräßéêr
" As per Sec. 44AB of I.T. Act :
For a person carrying on business : If the total sales, turnover or gross receipt in business for the previous year(s) relevant to the assessment year exceed or exceeds Rs. 40 Lakh and not the income.
For a person carrying on profession: If his gross receipts in profession for the previous year(s) relevant to the assessment year exceeds Rs. 10 lakh and not the income..
So, please consider the turnover for ascertainment of getting accounts audited on compulsory basis U/s 44AB.
"

Hi I think in the previous query. Sadanand doubt was if an individual as an interior decorator carries both profession as well as business. but your answer is totally different
 

Yes it covered under sec 44AB Tax Audit(See Para 5.3 & 5.4 )of Guidence notes on Tax Audit Issued By ICAI

In my opinion, the person is not liable to get his books of accounts audited u/s 44AB as either of the limites is not crossed. The section specifies that if the Gross turnover from business exceeds Rs. 40 lakhs or the Gross Receipts from profession exceed 10 lakhs, the person shall be liable to get his books of accounts audited under the section, i.e. 44AB.

 

In this case as the GT from business is Rs. 35 lakh and GR in Profession is Rs. 8 lakh, none of the threshold limits is said to be exceeded. So tax audit is not applicable under section 44AB.

 

However, if the net profit from business is below the rate of presumptive taxation, the person will be liable to get books of accounts audited under the presumptive audit section i.e from 44AD to 44AF whichever is applicable.

 

In my opinion, the person is not liable to get his books of accounts audited u/s 44AB as either of the limites is not crossed. The section specifies that if the Gross turnover from business exceeds Rs. 40 lakhs or the Gross Receipts from profession exceed 10 lakhs, the person shall be liable to get his books of accounts audited under the section, i.e. 44AB.

 

In this case as the GT from business is Rs. 35 lakh and GR in Profession is Rs. 8 lakh, none of the threshold limits is said to be exceeded. So tax audit is not applicable under section 44AB.

 

However, if the net profit from business is below the rate of presumptive taxation, the person will be liable to get books of accounts audited under the presumptive audit section i.e from 44AD to 44AF whichever is applicable.

 Yes SIR IS RIGHT

no...............he is not liable for audit as these limits are to be seperately considered


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