Partnership

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Querist : Anonymous

Querist : Anonymous (Querist)

04 June 2015 I have partnership firm of 40 lakh and profit is nil. Do i need to conduct audit?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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05 June 2015 there are two views on it:

1. that since there is no income, the condition provided under section 44AD(5) is not satisfied (income above exemption limit)

2. however, for partnership firms, there is no exemption limit. accordingly, if the profit is below 8%, the audit should apply.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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05 June 2015 No need of tax audit since the income is zero. Conversely, if income is Re 1 or more, tax audit becomes mandatory in the case of partnership firm if profit < 8% of turnover which should be one crore or less.

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