Sales Rs.55 Lacs.. Profit before salary and interest of partners Rs.12 Lacs..
P.Interest Rs.6 Lacs.. P.Salary Rs.3 Lacs..
So net Profit before taxes Rs.3 Lacs..
Is there an audit requirement as per 44AD ? -------------------------------- What if the NP before salary and interest is Rs.4 Lacs.. and consequently the NP before taxes is (Rs.5 Lacs).. is there an audit requirement here..
28 August 2011
1) Profit Rs. 12 lakhs(before salary and interest Rs. 9 lakhs) - No tax audit as profit exceeds 8% 2)Profit Rs. 4 lakhs (before salary and interest Rs. 9 lakhs)- Tax audit as it is less than 8% i.e (Rs. 55 x 8% = Rs.4.40 lakhs) 3)Profit Rs. 5 lakhs (before salary and interest Rs. 9 lakhs)- No tax audit as profit exceeds 8%
29 August 2011
Okay.. Thanx a lot.. There are CAs in my city who feel that the 8% limit is to be seen after deducting the salary and interest given to partners..
Which means for a sale of 55 Lacs, the Net profit after deducting S and I to partners has to be 4.4Lacs... And if it is less than that, then you have to get ur accounts audited..
Somehow I'm not able to buy this.. Can you guide me on this..
29 August 2011
In case of Partnership Firms, Partner's Salary & Interest is deducted after calculating net profit @ 8% on The Turnover i.e if Net profit is 4.4 lakhs then there is no requirement of Tax Audit, and Partner's Salary & Interest is deducted from Rs. 4.4 Lakhs
CAclubindia
