Gross receipts 15 lacs will be subjected to audit

This query is : Resolved

Guest

Guest (Querist)

25 May 2012 As per IT Norms, why is there a separate Policy for Traders and Manufacturers on one hand and the Service Providers on the other hand.

As per IT Norms, Any business with Gross receipts of More than 15 lacs will be subject to Audit of financials where as any business with gross sales turnover greater than 60 lacs will be subject to Audit of financials.

Why not Rs. 60 Lacs for Gross Receipts also?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 May 2012 Rs 15.00 Lac limit is applicable in connection with gross receipts from a profession.
.
An insurance agent, or a commission agent is though providing services , yet he is not
treated as professional. Limit of 60.00 lac applies to them.
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The basic reason for 2 different limits
lies in the fact that, a professional has to incur nominal direct costs to earn the income. whereas a trader /manufacturer has to incur direct costs like purchases of goods etc. He is having a very low margin in compare to Professionals.
.