Dear All,
Client is having turnover of Rs. 20 Lakhs for FY 13-14, Net Profit is 5 % i.e Rs. 100000/- and Salary income Rs.5 Lakhs, Housing loan Interest Loss is Rs. (150000), Interst income of Rs. 5000/- Gross Total Income is Rs. 400000/- Is audit compulsory ? Does it invite compulsory scrutiny ?
Please Reply
CA Rajesh Poddar
But Sir, specified profession or Business?
If the business is such that it falls u/s 44ad then declaring profit less than 8% invites tax audit.
Business of tours and travel
My startup having 20lakh turnover and my profit comes around 4% as income , then as per you NO AUDIT u/s44AD, but my CA saying below 8% i must have to get my accounts audited??
So far by reading of bate act wide sec.44AD , I found that the expression AND is used in both conditions of tax audit, that's why a question in my mind if it was either or case why AND used rather 8% OR total income greater than non taxable limit must have been used.
I hope you getting my point.pls refer bare act.
an eligible assessee who claims that his profits and gains from the eligible business
are lower than 8% and
whose total income exceeds the maximum amount which is not chargeable to income-tax,
shall be required
to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA
and
get them audited and furnish a report of such audit as required under section 44AB.
Above is extract from bare act,
& it's clear if profit <8%, audit is required, unless total income is below exemption slab
is audit required when we maintain books of account but firm profit less then 8% and our turnover less then 1cr.(firm is Tour and travel)
If u r profit is less than 8 % and the income exceeds the maximum amount which is not chargeable to tax then one needs to get his accounts audited.
CAclubindia
