08 August 2010
Net income of a Firm is Less than 5% of Turnover after deducting Salary & interest to the Partners, Whether this income is eligible to get Audit ?
Total Turnover of a Partnership FIRM : 38,00,000/- Income from business of Retail Trading (5% of Rs. 38,00,000/-) : 1,90,000 Salary & interest paid to partners as permitted by section 40b : 2,00,000 Income from Retail business: (10,000)
08 August 2010
As per proviso to section 44AF(2) interest and remuneration ,subject to 40(b), can be deducted from the 5 % profit computed under sub section 1 of section44AF. Hence your computation, prima facie, is correct. Since 44AF is complied, audit under section 44AB is not necessary.
CAclubindia
