Chirag Asija (NA) (59 Points)
09 July 2020A partnership firm (NOT LLP) incorporated on 01.04.2018. The total sales for FY 2018-19 is Rs.10,00,000/- and the profit is Rs.2,000/-. Please provide the solution for following queries:-
1. Whether the firm is liable for tax audit due to section 44AD (4) &(5) alongwith reasons for the same?
2. What would be the tax liability of the firm?
CA ABHAY GUPTA
(Practice)
(3235 Points)
Replied 09 July 2020
Chirag Asija
(NA)
(59 Points)
Replied 09 July 2020
Sir thank you for your instant reply. I want to further add something to this:-
A partnership firm is required to get its accounts audited under Section 44AD(5) when the firm falls under Section 44AD(4) and total income exceeds maximum amount not chargeable to tax, but in our case the firm is not falling under Section 44AD(4) because our firm is newly created and has not even once availed Section 44AD therefore according to me the firm is not covered under section 44AD(5) and hence not required to get its accounts audited.
CA ABHAY GUPTA
(Practice)
(3235 Points)
Replied 09 July 2020
Chirag Asija
(NA)
(59 Points)
Replied 09 July 2020
Sir our firm is in business not profession and also 44AD(4) & 44AB(d or e) are not applicable so why to get tax audit?
CA ABHAY GUPTA
(Practice)
(3235 Points)
Replied 09 July 2020
Chirag Asija
(NA)
(59 Points)
Replied 09 July 2020
Sir section 44AB(d) says that in case of a person carrying on the profession shall, if the profits and gains from the profession are deemed to be the profits and gains of such person under section 44ADA and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his profession and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year; or
So this is not applicable because we are not in professional services and are engaged in business of trading in goods
CA ABHAY GUPTA
(Practice)
(3235 Points)
Replied 09 July 2020
Chirag Asija
(NA)
(59 Points)
Replied 09 July 2020
Sir link is not opening please provide screenshots
CA ABHAY GUPTA
(Practice)
(3235 Points)
Replied 09 July 2020
Chirag Asija
(NA)
(59 Points)
Replied 09 July 2020
Sir this is not the updated act. Click on the link below to access the updated bare act:-
CA ABHAY GUPTA
(Practice)
(3235 Points)
Replied 09 July 2020
Chirag Asija
(NA)
(59 Points)
Replied 09 July 2020
Sir can you please provide your phone number as some confusion is still there
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