Meaning of income u/s 44ab(c) and if audit is complusory

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Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2013 What is the meaning of word “TOTAL INCOME” used in
section 44AD(5) and word “INCOME” used in section 44AB (c) whether
it is Gross total income or income after deducting all deductions
under chapter VI-A. Let me further explain, suppose my sale is 60
lakh and I declare profit from business below 8% i.e. Rs. 250000/- (
which also my GTI) and deduction U/S 80C is 55000/- . So my Taxable
income is 195000/-. My query is –
1. Whether income tax audit is compulsory?
2. If audit is compulsory, if I have to get digital signature?(plz
refer income tax rule 12(3)(aaa) which species that if you have to
audit ( it doest matter your sale is below 1 crore or more that 1
crore) you have to furnish your return under digital sign?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 August 2013 Section 44AD(5) talks loudly about Total Income which is 195000/-.
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U/s 44AB(d) where "total income" has been reduced to merely "income" also should be understood as "Total Income" as the requirement of Audit emanates from Section 44AD(5).
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Conversely, if you come via- Section 44AB(d),
then also requirement of tax audit will be there only when "Total" Income exceeds the taxable limit as per Section 44AD(5).
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In case of Audit, (you must opt) digital signature is compulsory.

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Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2013 So,Paras Sir, You Want To say that in my case Audit is not necessary.

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Querist : Anonymous

Querist : Anonymous (Querist)

28 August 2013 so,experts, you want to say that in my case audit is not compulsory?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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28 August 2013 Any one can say that audit is not compulsory as per Section 44AD(5) if you believe upon the law.
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But, the problem area is-
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our tax system is now no more trust-worthy, every provision is ( and has to be) seen with a suspicious look.
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The asseess is left in the dilemma.
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If he shows lower profit and files un-audited accounts- doubts of selection for the scrutiny creeps into his mind till the next year's September. Though he will file his return, he can not feel free.
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If he decides to get his accounts audited he has to incur further expenditure and devote his precious time.
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Time consumption and wastage of hard earned money is common in both the eventualities. The only difference left is discomfort which can be normalised by adopting the criteria of the Net Present Value or Future Value of Cash ....Outflow.
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