Under section 44AD there is provision of 8% profit. In the case of partnership firm partners salary & Interest on capital is allowable. It means if befor salry and interest is above 8% and after partners salary and interest on capital the net profit is below 8% (say 3%) there is no requirement of tax audit under section 44AB.
I want to know whether my contention is true or not?
Regards
If your Turnover/Gross Receipt is less than Rs. 60 lacs upto A.Y. 2012-2013 & Rs. 100 lacs from A.Y. 2013-2014 then one Individual/HUF/Pratnership Firm will be eligible to compute his tax liability u/s 44AD which is @ 8% or any heigher persentage on such Gross Receipt/Turnover, Partneers Salary & Interest on capital will be deduct from his tax liability. Such one one partnership firm having turnover Rs. 58 lacs & they paid Rs. 36,000.00 as partners Salary & Rs. 15000.00 as Interest on Partners Capital. then is tax liability will be =Rs.413000.00 (i.e. 8% of Rs. 58 lacs-Rs.36000-Rs.15000)
The profit so computed shall be before partners remuneration and interest.
| Originally posted by : DIBYENDU | ||
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If your Turnover/Gross Receipt is less than Rs. 60 lacs upto A.Y. 2012-2013 & Rs. 100 lacs from A.Y. 2013-2014 then one Individual/HUF/Pratnership Firm will be eligible to compute his tax liability u/s 44AD which is @ 8% or any heigher persentage on such Gross Receipt/Turnover, Partneers Salary & Interest on capital will be deduct from his tax liability. Such one one partnership firm having turnover Rs. 58 lacs & they paid Rs. 36,000.00 as partners Salary & Rs. 15000.00 as Interest on Partners Capital. then is tax liability will be =Rs.413000.00 (i.e. 8% of Rs. 58 lacs-Rs.36000-Rs.15000) |
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If the profit has gone below 8% then I would suggest you to go for Audit u/s 44AD as because the tax at 8% profit will be around 139000 and if the audit is conducted then audit fees will not be much high as the tax is. Further you can have safety against the Department as being the accounts are audited by the CA.
Thanks to all
CAclubindia
