Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Section 44ab

CA Pallav Singhania (IT System Auditor) (33262 Points)

12 September 2011

amendmend relating to SEC 44AB?

please suggest is there a change that instead of 40 lac its changed to 60 lacs??

Reply
Follow
Share

14 Replies

Annu.R (CA,CS,B.Com) (2788 Points)
Replied 12 September 2011

A. Under the existing provisions of section 44AB, every person carrying on business is required to get his accounts audited if the total sales, turnover or gross receipts in business exceed forty lakh rupees in the previous year. Similarly, a person carrying on a profession is required to get his accounts audited if the gross receipts in profession exceed ten lakh rupees in the previous year.

In order to reduce compliance burden of small businesses and professionals, it is proposed to increase the aforesaid threshold limit from forty lakh rupees to sixty lakh rupees in the case of persons carrying on business and from ten lakh rupees to fifteen lakh rupees in the case of persons carrying on profession.

B. In view of the amendment proposed above, it is also proposed to increase the maximum penalty, leviable under section 271B for failure to get accounts audited under section 44AB or to furnish a report of such audit, from one lakh rupees to one lakh

fifty thousand rupees.

C. It is also proposed that for the purpose of presumptive taxation under section 44AD, the threshold limit of total turnover or gross receipts would be increased from forty lakh rupees to sixty lakh rupees.

D. Further penalty on non compliance of audit provisions u/s 271B has also been increased to Rs 1,50000/- from Rs 1,00000 earlier

These amendments are proposed to take effect from 1st April, 2011 and will, accordingly, apply in relation to the assessment year 2011-12 and subsequent years.

RELATED CLAUSES REPRODUCED HEREUNDER

14. In section 44AB of the Income-tax Act, with effect from the 1st day of April, 2011,—

(a) in clause (a), for the words “forty lakh rupees”, the words “sixty lakh rupees” shall be substituted;

(b) in clause (b), for the words “ten lakh rupees”, the words “fifteen lakh rupees” shall be substituted.

15. In section 44AD of the Income-tax Act [as amended by section 20 of the Finance (No. 2) Act, 2009], in the Explanation, in clause (b), in sub-clause (ii), for the words “forty lakh rupees”, the words “sixty lakh rupees” shall be substituted with effect from the 1st day of April, 2011.

50. In section 271B of the Income-tax Act, for the words “one hundred thousand rupees”, the words “one hundred fifty thousand rupees” shall be substituted with effect from the 1st day of April, 2011.

Upgrade to CAclubindia Pro. Subscribe Now!

* Krishna * (CA Student) (6149 Points)
Replied 12 September 2011

Amendments are as follows:

In case of business, the threshold limit is increased from Rs 40 lacs to Ts 60 lacs

In case of profession, the threshold limit is increased from Rs 10 lacs to Rs 15 lacs

CA Pallav Singhania (IT System Auditor) (33262 Points)
Replied 12 September 2011

but sir if the turnover is not exceeding 60 lacs but the profit exceed 8 % then form ITR 4 is compulsory????

Annu.R (CA,CS,B.Com) (2788 Points)
Replied 12 September 2011

As per section 44AF, if turnover in a retail business is less than Rs.40 lakhs and income disclosed is 5% or more of gross receipts, then maintenance of books u/s 44AA is not compulsory. Thus, in case of retail business if turnover is Rs. 35 lakhs and income disclosed is 8%, then there is no requirement of maintaining the books of account as per the provisions of section 44AA.
It should be noted that from assessment year 2011-12, new section 44AD is applicable in case of all businesses, and hence from assessment year 2011-12, section 44AF will be inoperative. Following is an overview of new section 44AD :

The scheme of presumptive taxation of section 44AD is applicable to a resident assessee who is an individual or Hindu undivided family or a partnership firm but not limited liability partnership firm.
These provisions can be adopted by an assessee engaged in any business (except the business of plying, hiring or leasing goods carriages referred to in section 44AE), whose turnover or gross receipts from such business does not exceed Rs. 60,00,000 (Rs. 40,00,000 up to financial year 2009-10). Further, these provisions can be adopted by the assessee only if he has not claimed deduction under section 10A/10AA/10B/10BA or sections 80HH to 80RRB in the relevant year.
In case of an assessee who is willing to adopt these provisions, income will be computed on estimated basis @ 8% of turnover or gross receipts of such business, for the previous year.
Provisions relating to the payment of advance tax shall not apply to such an assessee, in respect of business covered under section 44AD.
An assessee, who adopts provisions of section 44AD, is not required to maintain books of account as per section 44AA (applicable only for business covered by this section). Further, in respect of such business, the provisions of section 44AB (relating to audit) are also not applicable.
An assessee can at his option declare higher income (i.e., higher than 8%).

1 Like

CA Pallav Singhania (IT System Auditor) (33262 Points)
Replied 12 September 2011

Annu ji......

great work done by you....

resolving my all poblems....

Upgrade to CAclubindia Pro. Subscribe Now!

Annu.R (CA,CS,B.Com) (2788 Points)
Replied 12 September 2011

Too icon ke upar thanks dene ka haq bhi too banta he.......... hahaha

1 Like

CA Pallav Singhania (IT System Auditor) (33262 Points)
Replied 12 September 2011

ha ha ha..............great one......

so U R A CS>>>

then pls suggest me......

CA ke sath CS karna koi logic banta hai....ki degree ke liye??

Annu.R (CA,CS,B.Com) (2788 Points)
Replied 13 September 2011

iske baad LLB ka bhi vichaar he..........CA ke saath CS ka sabse aacha combination he oor easy bhi he

dono courses ka 70% ek jaisa he.........oor CS...LLB ka 29% cover karta he.

Karan Teli (Life Is just an Illusion...!!) (4573 Points)
Replied 13 September 2011

hey friend pls check out this link -

This will be most uselful to clear all ur queries..

/articles/tax-audit-a-glance-11159.asp

Karan Teli (Life Is just an Illusion...!!) (4573 Points)
Replied 13 September 2011

@ annu - Yaar kitna padoge...?

Upgrade to CAclubindia Pro. Subscribe Now!

Annu.R (CA,CS,B.Com) (2788 Points)
Replied 13 September 2011

Just 08 years more..........hahaha.....we wants to became a perfect CA.

Karan Teli (Life Is just an Illusion...!!) (4573 Points)
Replied 13 September 2011

Actually didnt get u...??

08 more means...

Annu.R (CA,CS,B.Com) (2788 Points)
Replied 13 September 2011

From this time......and 5 years after CA Final......

LLB,III and IIBF

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 13 September 2011

Originally posted by : annu.R
	iske baad LLB ka bhi vichaar he..........CA ke saath CS ka sabse aacha combination he oor easy bhi he dono courses ka 70% ek jaisa he.........oor CS...LLB ka 29% cover karta he.