ravi (senior accountant) (507 Points)
06 December 2011Hi All,
My Client Turnover Rs.43 lacs for the PY2010-11. For the AY 11-12 Tax audit limit is 60lacs and For 44AD (any business) it is Rs.40lacs. Now pls tell me whether my client is to be audited or not . I mean tax audit required or not.
From the above facts my questions are 2
One is he is not falling under 44AD (small businessman)
Two is he is not coming under tax audit limit now pls tell me whether he should be audited or not for that year: thanks all
C.A. Jignesh N. Mehta
(C.A.)
(1030 Points)
Replied 06 December 2011
Explanation.—For the purposes of this section,—
(a) “eligible assessee” means,—
(i) an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009) 27a ; and
(ii) who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading “C. - Deductions in respect of certain incomes” in the relevant assessment year;
(b) “eligible business” means,—
(i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and
(ii) whose total turnover or gross receipts in the previous year does not exceed an amount of 28 [sixty lakh rupees].]
Dear Ravi,
Answer to your 1st Question is , YES your client falls under Section 44AD.
Answer to your 2nd Question is as under:-
If the Profit is more than 8% then , he does not require to get his accounts audited and pay tax on gross turnover * 8% = income.
If the profit is less than 8% of turnover (gross) , then your client needs to get his accounts audited u/s 44AB r.w.s. 44AD.
I hope your question is answered.
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