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RAKSHIT MEHTA (tax consultant) (114 Points)

23 May 2017

A client have an recharge agency of airtel for which i get 1% commission from airtel on every recharge. gross recharge done for the year was around 1cr. Is he liable to declare the profit at 8% or to get his books audited in 44AB?

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4 Replies

Rupesh (Articled assistant) (34 Points)
Replied 23 May 2017

For an agent, turnover is the commission earned by him and not the aggregate amount for which sales are effected or services are rendered. for agent, turnover is the commission earned by him.

Rupesh (Articled assistant) (34 Points)
Replied 23 May 2017

So your case is not covered under tax audit. however section 44AD excludes agency / commission business from scheme of presumptive taxation.

Rupesh (Articled assistant) (34 Points)
Replied 23 May 2017

so you need to determine the profit as per regular accounting method followed and file return accordingly.

Golden Varshney (Acticle Assistant) (27 Points)
Replied 23 May 2017

As this is the case of brokerage and commission so 8% is not applicable ie section 44AD and for getting books of account audited turnover should exceed Rs I crore since in your query this is gross amount of recharge if you calculate the commission amount and if ir exceed Rs 1 crore then tax audit is applicable

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