Tax audit

This query is : Resolved

Rahul Verma (Querist)
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01 September 2015 Dear Colleagues

Have some doubt, kindly resolve

As per 44AB, If turnover exceeds Rs 1 Cr. Then person (Firm) liable to get tax audit u/s 44AB.

Also a firm can adopt itself under 44AD by showing profit of 8% of total/gross turnover. By adopting this there is no liability on company to get tax audit u/s 44AB.

Also firm who claims that his profits and gains from the eligible business are lower than the 8% and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to get them audited and furnish a report of such audit as required under section 44AB.

So my question is A firm having total turnover:- 50 Lacs
Net Profit :- Nil or Loss

Now whether the firm is liable to get its books audited under sec 44AB????

Rahul

CA D.C. Bansal

CA D.C. Bansal (Expert)
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01 September 2015 You are not required to get your accounts audited u/s 44AB but you are required to get your accounts audited u/s 44AD.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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02 September 2015 1. Turnover is Rs. 50 lakhs. Condition as in 44AB(a) is not satified. - No need of tax audit under that section.

2. Net profit is Nil/Loss. Condition as in 44AD(5) is NOT satisfied. No need of tax audit U/s 44AB(d). Conversely if the partnership firm's net profit is Re.1 or more, condition as in 44AD(5) satisfies, meaning there by accounts are to be audited u/s 44AB(d).

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