Tax audit

This query is : Resolved 

03 August 2013 Sir
I have one client whose turnover is less than 1 crores and profit is also less than 8% but he is not opting for 44AD, now could you please confirm whether he is lible for tax audit. Please also confirm in which case person is lible for tax audit.

03 August 2013 he have to audit his a/c due to profit declare less than 8% of turnover

I a person turnover over rs. 1.00 then he have to compulsory audit of his a/c then no case of profit it is 8% or not

03 August 2013 but according to section 44AB if turnover is more than 1 crore then only he is liable for tax audit


03 August 2013 but according to section 44AB if turnover is more than 1 crore then only he is liable for tax audit

03 August 2013 Is 44AD is optional or mandatory?

03 August 2013 its optionl but if you fall under 44af due to sale is below 1 crore then you have to declare 8% profit or take audit report


03 August 2013 and if the firm have loss then also he is required to do tax audit

03 August 2013 sir
but now 44af has been abolished, and 44ad says if you opt for it, you dnt have to maintain a books of accounts and no need for tax audit and 44ab says that if your turnover is more than 1 crore than you are lible for tax audit.
but my client have manufaturing business and his turnover is 77 lakh and his profit 530448 as per books,
now my question is his turover is not exceeding 1 crore and he is not opting for 44ad also so when i m filing his return then software is saying you are lible for for tax audit.
When his turnover is not more then 1 crore then why he is lible for tax audit?


03 August 2013 Swati mam the reason is as simple as that any business showing profits less than 8% and whose turnover doesnt exceeds 1 crore is also liable for tax audit.

03 August 2013 And yes Sec 44AD is optional.

03 August 2013 thank you richi sir
and in case where business is having loss then also he is liable for tax audit now?
Please confirm

03 August 2013 now in every case if his profit is more then exemption limit and turnover less than 1 crore and he is showing profit less then 8% then he is liable for tax audit.

Please confirm what will be the provision for partnership firm?
in case of partnership, for rs 1 profit also he is lible for tax audit.


03 August 2013 If Net profit is Re.1, than technically -Audit U/s 44AD(5) vis-a-vis U/s 44AB(d) will
be compulsory.
.
Provision for firms:
---------------------

Show 8% Profit on Turnover.
Deduct Interest from it.
From the balance deduct salary to partner(Max. salary is allowable as per Section U/s 40(b))
If there is a loss no need to get the accounts audited. If-profit- pay tax @ 30% on such profit.
.


.

05 August 2013 Thanks a lot to all

06 August 2013 Paras Sir has correctly replied to your query.




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