09 June 2011
If an individual having income below basic exemption carrying eligible business has profit from business less than 8% of turnover. Is he eligible for tax audit?
If a Incivisual haveing income from eligible business below the max. amount not chargeable to Tax. (i.e. 1.8 lakh,1.9lakh or as a case may be)than the provision of sec 44AD shall not apply on such income.
09 June 2011
Point is whether his income on presumptive basis exceeds basic exemption limit or not? If no, then audit is not required even if his income is less than8%. If yes, then audit is required.
09 June 2011
Sorry Mr. Jha, I am not agree with your above interpretation.
The Language of the Act is as follows :
Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.
the Act speaks about the profit lower than 8% but dont say that calculation of the max. amount which is not chargeable to income tax, should be on the basis of 8%. so if the actual income is less than the limit than a assessee doesnt fall under the provision of Sec. 44AD.
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