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IT audit mandatory or not

Ashish Jain (Student) (191 Points)

11 March 2024

Hello friends. Need a clarification. In the year 2020-21 my business turnover was 1.25Cr. whereas my business income is 2.19L only. But my total income is 5.10L. Now I would like to know whether will have to audit my books or not required. Please help.

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4 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 11 March 2024

What is Your business...??

out of the above question, Tax Audit is applicable if Turn Over exceeds 1cr.

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Ashish Jain (Student) (191 Points)
Replied 11 March 2024

Trading in tyre retreading materials

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 11 March 2024

Originally posted by : Ashish Jain
	Trading in tyre retreading materials

U/s 44AB :

TAX AUDI applicable if Total sales, turnover or gross receipts exceed Rs. 1 crore in the FY.

If cash transactions are up to 5% of total gross receipts and payments, the threshold limit of turnover for tax audit is increased to Rs. 10 crores (w.e.f. FY 2020-21).

U/s 44AD :

Carrying on business which is declaring profits as per presumptive taxation scheme under Section 44AD If the total sales, turnover, or gross receipts do not exceed Rs. 2 crore in the financial year, then tax audit will not apply to such businesses.

Nikhil Kaushik (Fellow CA) (85743 Points)
Replied 11 March 2024

just one correction, if your income is above the tax exemption limit, as per section 44AD(5), audit will apply if the profit percentage is below the prescribed limit that is 6% for non-cash transactions and 8% for cash transactions.