Is tax audit compulsory in the following cases

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Aum Maheta

none yet

216 Points Joined September 2011

case (1) a Proprietory concern is having turnover of rs.50 lakhs in P.Y- 2011-12 (A.Y. 2012-13) and net profit of rs. 4.5 lakh.....now if he/she shows rs. 4.5 lakh being higher then 8% of rs. 50 lakhs ( i.e- rs.4 lakh) in his/her Income Tax Return.......will it attract sec.-44AB .....and is tax audit required in such a case........???

case (2) if profit is rs. 3.8 lakh and profit shown in I.T Return is rs. 4 lakh (8% of rs. 50 lakhs being higher then rs. 3.8 lakh) ....is Tax Audit Compulsory in such a case.....

In both cases books of A/c's are maintained .......

Replies (2)

Abhimanyu Bind

CA Final Student & Audit Assitant

2051 Points Joined February 2010

Hi,

We can answer your query as follows,

Tax Audit limit for the A.Y. 2012-13 is Rs. 60 Lakhs or above so,

(1) Now if Assessee is showing higher profit which is more than presumptitive taxation rate i.e. 8% then in that case S/he doesn't not required TAX AUDIT.

(2)Now, in second case if Assessee is showing less profit then the rate of presumptive taxation i.e. 3.8 Lakhs which is less then 8% then S/he required to Get Audited His/Her accounts from CHARTERED ACCOUNTANT. i.e. It attracts Tax Audit.

Regards,

Abhi