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Partner ship firm audit

T.T.VIJAYAPRAKASH (properter) (253 Points)

06 September 2019

M/S A FIRM FOR FORU PARTNER. TOTAL SALES FOR THE FY 2018-19 RS. 60.00LAKTHE NET PROFIT IS 1.00.LAOKS. NOT CHARGED IN PARTNER SALARY IN PL A/C. ONLY PARTNER INTEREST CHARGED RS. 3.00 LAKKS.

AUDIT TO BE MUST?

THANKS TO ALL

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7 Replies

pooja (taxpracticing) (269 Points)
Replied 06 September 2019

if you are paying taxes on presumtive income basis as 44ad , than profit is below 8% so ...in such case you have to audit your books of account .... otherwise your turnover is below RS 1 crore so you need not to do audit ....thank you sir

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Jinal Dabhi (std) (84 Points)
Replied 06 September 2019

Tax Audit applicable.

3 Like

Sarath Rajendran (Nil) (2791 Points)
Replied 07 September 2019

In your case tax audit is not applicable

CA. Atul Pithadia (Chartered Accountant) (60 Points)
Replied 07 September 2019

Why not applicable kindly explain?

T.T.VIJAYAPRAKASH (properter) (253 Points)
Replied 09 September 2019

DEAR SIR MR. ATUL PITHADIA

MY QUERY IS

TOTAL SALES RS. 60.00. LAKS (THE PARTNERSHIP FIRM)

PARTNER INTEREST RS. 3.00. LAKS

NET PROFIT RS. 1.00. LAKS

NO PARTNER SALARY IN P/L A/C

IF THE FIRM APPLICABLE U.S 44AD?

CLAUSE 44AB (e) profits and gains lower than deemed profit u/s 44ad?

thanks to all

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CA. Atul Pithadia (Chartered Accountant) (60 Points)
Replied 10 September 2019

Since your profit is Rs. 1.00 lacs which is 1.66% of total sale of 60.00 lacs then Tax audit is mandatory beacuse as per Sec 44AD 6% or 8% profit need to be maintained after payment of Interest and remuneration to partner and not before.

Shorya (CA Article) (105 Points)
Replied 11 September 2019

The law clearly states that u/s 44AD, you will get books audited if you've claimed presumptive benefit in any previous year, and you don't continue to claim benefit under presumptive for further 5 AY's from the relevant i.e., say in AY 2017-18 you've taken 44AD, in any of the AY 2018-19,2019-20,2020-21,2021-22 you DO NOT continue with presumptive scheme, you maintain BOA & get it audited duly.