PVS Sastry (FCA) (47 Points)
25 May 2017Hi friends,
Please clarify my doubt with regard to amendments in finance act,2016. Is audit under section 44AB compulsory in case of firms declaring profits higher than 8% of turnover and having turnover less than 2 crores. If answer is no, clarify whether interest and remuneration given to partners is allowable as deduction under section 40(b). Please provide a quick reply with suitable examples and sections.
Thanks in advance
PRABIR PAUL
(*****Accountant***** Never insult to any person for any kind of lack of knowledge or misread.)
(1443 Points)
Replied 25 May 2017
If your turnover is less than 2 Crores and your book profit (Actual) is more than 8% then you are eligible to declare your income U/s 44AD. Because 44AD consider on deemed profit(8%) and actual profit whichever is higher In that case you are not liable for audit.
As per Finance Act 2016 40(b) is not allowable after calculation of section 44AD.
CA Bhargav Nathwani
(CA in Practice)
(8307 Points)
Replied 25 May 2017
| Originally posted by : PVS Sastry | ||
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Hi friends, Please clarify my doubt with regard to amendments in finance act,2016. Is audit under section 44AB compulsory in case of firms declaring profits higher than 8% of turnover and having turnover less than 2 crores. If answer is no, clarify whether interest and remuneration given to partners is allowable as deduction under section 40(b). Please provide a quick reply with suitable examples and sections. Thanks in advance |
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1) Turnover is less than 2 Cr
AND
2) Profit is above 8% of sales..
Yes, You have to do Audit under section 44AB.
Answer is Yes..2nd question need not to be discuss in your case.
rama krishnan
(12239 Points)
Replied 25 May 2017
CAclubindia
