Renuka (Accountant) (107 Points)
06 June 2015An Assessee engaged in Labour Supply Contract Service, and have done Tax Audit for A.Y.14-15 for very 1st time and got the assessment order with no issues,
For A.Y.15-16 he is having a less income than prescribed limit for Tax Audit, is it necessary for him to goo for Tax audit,
One thing that I have observed he has made maximum payment to sub contractors and have not deducted TDS, can any expert elaborate on this, what are the consequences he is going face.
Regards
Renu
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 06 June 2015
Assuming assesee to be individual, If during AY 15-16, gross receipts also does not exceed 1 crore, then no need of tax audit, in which case no need to deduction of TDS.
But if s/he is declaring income on presumptive basis (44AD), then if actual income going to be declared is less than the prescribed limit (8%), s/he is required to get books audited u/s 44AB and also liable for deduction/payment of TDS.
Renuka
(Accountant)
(107 Points)
Replied 06 June 2015
Yes Assessee is an Individual, and having an inomce Rs.9000000.00 and Net profit -300000.00
But the important thing is he has collected service tax on above amount and not paid a single penny, which will be treated as profit.
in this condition how do you treat those payment which he made to sub-contractors. without deducting TDS.
what do u suggest........
Regards
Renu
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 06 June 2015
Not only income even gross receipts should not exceed 1 crore. If so, no tax audit and no tds deduction required
Ashok J
(CA Final)
(880 Points)
Replied 06 June 2015
Hi
Since for FY 13-14, he is under Tax audit - he is liable to deduct TDS on payments in FY 14-15. If not deducted 30% of payments will be treated as taxable income..
For FY 14-15, if gross receipts (including Service tax) exceeds 1 crore, mandatory tax audit....if its less than 1 crore and he wants to declare taxable income of less than 8 lacs, then also tax audit is mandatory
Nikhil Kaushik
(Fellow CA)
(85761 Points)
Replied 06 June 2015
| Originally posted by : Poornima Madhava | ||
 |
Assuming assesee to be individual, If during AY 15-16, gross receipts also does not exceed 1 crore, then no need of tax audit, in which case no need to deduction of TDS. But if s/he is declaring income on presumptive basis (44AD), then if actual income going to be declared is less than the prescribed limit (8%), s/he is required to get books audited u/s 44AB and also liable for deduction/payment of TDS. |
 |
Dear Poornima,
Please note that if a person is liable for an audit under section 44AB(d) ie because of application of 44AD(5), then TDS regulations dont apply to him.
TDS is specifically applicable only in cases where the turnover exceeds the limit provided under clause (a) or (b) of the section 44AB
Gnanashekar.R
(Chartered Accoutant)
(64 Points)
Replied 07 June 2015
Ashok J
(CA Final)
(880 Points)
Replied 08 June 2015
@ Mr. Gnanashekar
Taxable income is computed irrespective of whether you are under tax audit or not...based on my prev reply...disalloance as well as liability to deduct TDS is attracted....Pls specify where is it mentioned when thre is no tax audit no disallowance is attracted..
eswar
(practice)
(79 Points)
Replied 12 June 2015
CAclubindia
