Section 44ad & tax audit
This query is : Resolved
08 December 2012
If a Partnership firm as retailer cum whole seller in cleaning items has turnover of Rs. 35 Lakhs and Net profit of around 1 Lakh (before partners remuneration and interest)in F.Y 11-12.Will it be subject to tax audit as per section 44AD? Further there is an exception, provided the income of assesee is below exemption limit. Will that exception work in this case. Kindly clarify. Thanks in advance.
08 December 2012
Since the turnover DOES NOT exceed Rs. 60 lakhs, the firm is NOT required to get its accounts audited.
Further, it can declare profit u/s 44AD.
However, if it wants to show a profit less than 8%, then it is required to get its accounts audited.
Accordingly, if the firm wants to a show a profit of RS. 1 lakh only, then it is required to get its accounts audited.
The exemption limit is NIL for a partnership firm, so no benefit is available.
However, if there is a LOSS then it is NOT required to get its accounts audited.
Further, it can declare profit u/s 44AD.
However, if it wants to show a profit less than 8%, then it is required to get its accounts audited.
Accordingly, if the firm wants to a show a profit of RS. 1 lakh only, then it is required to get its accounts audited.
The exemption limit is NIL for a partnership firm, so no benefit is available.
However, if there is a LOSS then it is NOT required to get its accounts audited.
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