My client is engaged in the supply of crane on contractual basis from one place to other not owing any vehicle opted presumptive taxation scheme under section 44AD for the FY 2021-2022 because his turnover is 1,90,00,000/-. But A.O is saying that as his turnover exceed 1 crore he is mendatorily required to Audit under section 44AB of IT ACT,1961 & TDS Provision also applicable.
Please expert resolve my query as soon as possible.
24 November 2022
For AY 2022-23, an eligible assessee has option to declare eligible business u/s. 44AD, provided the turnover is upto 2 Crs. As per sec. 44AD, the assessee is not required to maintain books of accounts, and no question of audit u/s 44AB(a), unless specified as under sub- sec. 44AB(e) r.w.s. 44AD(5).
After the amendment in finance act, 2020; all the assessee including the persons declaring income under presumptive assessment are required to deduct TDS, if their income exceeded 1 Cr. in immediate preceding year.
24 November 2022
Thank you sir for the reply, my question is whether Section 44AB & TDS Provision is applicable in the above case. As the clients turnover is upto 2 crore and has opted presumptive taxation scheme under section 44AD in all the 3 previous years?
24 November 2022
I confirm that Audit u/s. 44AB(e) can be applied for default of sec. 44AD(4) & (5), but audit u/s. 44AB(a) cannot apply for assessee declaring income u/s. 44AD of the act. Yes, now TDS liability u/s. TDS U/s 194C, 194H, 194I, 194J also arises in PY if the business turnover exceeded Rs. 1 cr. in immediate preceding year. However, no disallowance of any expenses due to the default is applicable.
24 November 2022
Kindly refer clause no. 76-79 (page 35 of finance act, 2020 for the amendment in the TDS deduction for individuals & HUF.. https://www.cbic.gov.in/resources//htdocs-cbec/Finance_Bill-2021.pdf
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