Deduction of unabsirbed loss & depreciation u/s 44ad

This query is : Resolved

CA Jigisha (Querist)
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09 August 2011 MY one of the client has turnover below 60 lacs and earned profit below 8% of turnover.

Also he has Brought forward loss & Depreciation from earlier years. So that his net taxable income is becoming NIL.

Please tell Whether he is liable to Audit U/s 44AD or not?

CA Navin Jain

CA Navin Jain (Expert)
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09 August 2011 yes he liable for audit.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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09 August 2011 If the profit (which is less than 8% of the turnover in the cited issue) do not exceed the maximum amount which is not chargeable to tax, audit is not required vide section 44AD(5). To check the audit requirement, unabsorbed depreciation and carried forward business loss is not at all a criterion.

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