SEc 44 AD ..

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CA Vishal kapoor (Querist)
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29 June 2011 Hi,
My question is that if the Firm has a annual turnover of 25 Lakh showing annual Profit of Rs 150000 (6%).
As per the Provisions of Section 44 AD (5)
(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) ofsection 44AA and get them audited and furnish a report of such audit as required under section 44AB.
In our Case our Income is Below the Maximum amount Not Chargeable to Tax.
So Whether the firm is required to gets his account audited.?
& My Second Question is ,
If the Audit is applicable ,whether in the following year TDS liability is Applicable or not.?

Thanks
Vishal

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)
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29 June 2011 In my opinion there is no minimum exemption for a firm. Therefore if profits are less than 8% the firm is liable for tax audit.

As regards TDS liability since the entity here is a firm, it is liable to deduct TDS from very first year.

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CA Vishal kapoor

CA Vishal kapoor (Querist)
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29 June 2011 Thanks Mr Krishna

Sorry for conveying incomplete Information.
Firm here means Proprietorship Firm.

Sir In the Sec 44 AD (5) It is clearlt written that
"whose total income exceeds the maximum amount which is not chargeable to income-tax"
In my case it is below the exemption Limit..

And what wil happen if my Sale is 20 lakh & my profit is 160000.

I think If my sale is 18 lakh showing profit of 125000(7%) then we are not required to gets his account Audited..

Thanks Sir

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CA Vishal kapoor

CA Vishal kapoor (Querist)
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29 June 2011 Sir,
If the Firm is a Prop Firm than TDS is not applicable in the next year because of the following Provision written under sec 194 H in exception

"Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such commission or brokerage is credited or paid, shall be liable to deduct income-tax under this section"

Sir it is clearly written that if the Gross receipt or turnover exceeds the Limit specified U/S 44 AB (ie 60 Lakh) than TDS is applicable. Now in my case TDS is Not applicable in the next Year..

Correct me if my view is Wrong..

Thanks Sir

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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30 June 2011 u have replied ur query

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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30 June 2011 For 44AD the criteria is below th limit of tax audit and profit below 8%

For TDS if individual or HuF then the criteria is turnover above tax audit limit which is present 60 lacs.

Other matters have nicely been clarified the learned experts.

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