44AD and salary to partners
deepak v
(43 Points)
Further would there be any disalowamces like 40A(3)???
RAJA P M
("Do the Right Thing...!!!")
(128068 Points)
Replied 20 July 2020
Lokesh
(student)
(23 Points)
Replied 20 July 2020
deepak v
(43 Points)
Replied 20 July 2020
CA Payal Gupta
(Chartered Accountant)
(154 Points)
Replied 20 July 2020
Dear Deepak,
Referring to your query, please consider my below-mentioned views:
Section 44AD(1) starts with“Notwithstanding Anything to contrary contained in section 28 to 43C”, which means section 28 to 43C of Income Tax Act, 1961 is not applicable on eligible assessee carrying on an eligible business under section 44AD. Hence, no disallowance 40A(3)can be made.
Please do let us know in case of any concerns.
deepak v
(43 Points)
Replied 20 July 2020
abdulqadir
(ca)
(72 Points)
Replied 23 July 2020
Sir for Tax audit Limit has been Increased to 5cr by finance act 2020
But correspond Effect has not been given in 44ad
so suppose assesee turnover is 3cr and his cash payment or reciept is less than 5 percent
so he avoid taxuaidt and show profit less than 6 %?
CA Payal Gupta
(Chartered Accountant)
(154 Points)
Replied 23 July 2020
@ Abdulqadir,
Referring to your query, please refer the following views:
Applicability of Tax Audit u/s 44AB
Business: If total annual turnover, sales, or gross receipts exceeds INR 1 crores.
Applicable from 01.04.2020, where the aggregate of all amount received including the amount received from sale, turnover, and aggregate of all payments made including amount incurred for expenditure, in cash, the following will be the provisions applicable for tax audit:
|
% of Aggregate of the amount received in Cash and expenditures paid in cash |
|
More than 5% |
Less than 5% |
|
Tax Audit limit |
1 Crores |
5 Crores |
Now come to your question, In case turnover is INR 3 Cr. and Receipt or payment is less than 5%, then under normal provisions Tax Audit will not be applicable.
And under section 44AD, you cannot avail presumptive benefit as your turnover limit exceeds INR 2Cr.
Further, please note that if you show your income or profit less than 6% or 8% as the case may be in Section 44AD then Tax Audit will be applicable in any case accordingly.
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