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Tax audit

Shrividhya (CA Final Student) (74 Points)

20 August 2018

My clients turnover for the FY 2017-2018 is Rs. 95Lacs that is less than one crore. So whether tax audit is compulsory for him? he s maintaining proper books of accounts. if tax audit is not compulsory whether we need to show profit more than 8%? pls help

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10 Replies

Ankita Chachan (practitioner) (548 Points)
Replied 20 August 2018

Tax audit is not compulsory in your case.

it means u opt for presumtive taxation. Profit at the rate 8% should be shown

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CA Bhavik Soni (867 Points)
Replied 20 August 2018

I assume it is including GST. In yr case if turnover including GST, not more than 1 crore, simply offer adjusted profit more than 8%, else Audit is required u/s 44AB(e).
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Ankita Chachan (practitioner) (548 Points)
Replied 20 August 2018

Turnover will be excluding GST.

CA Bhavik Soni (867 Points)
Replied 20 August 2018

Kindly refer SC ruling in cae of "Chaurangi sales beauro".

Ankita Chachan (practitioner) (548 Points)
Replied 20 August 2018

Thanks for the update. It is covered under sec 145A of Income Tax Act

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CA P V N Varma (CA ) (609 Points)
Replied 20 August 2018

First of all, your are not liable for Tax audit since your turnover is less than rupees 1 Crore(Rs.50 lakhs for Professionals). if your client is an individual or HUF or Firm(other than LLP) and opted for Presumptive Taxation u/s 44AD you need to show at least 8% of total turnover as Business Income (if transactions made through other than cash it is 6%).If not opted for Presumptive Taxation No need to maintain these Percentage as profit... Presumptive Taxation U/s 44AD is available upto 2 crores turnover.. so even if your client having turnover of more than 1 Crore but opted for Presumptive Taxation no need to get Tax Audit U/s 44AB and no need to maintain Books of accounts. it is the Special exemption available for Sec 44AD..

FAHEEM AKRAM (293 Points)
Replied 21 August 2018

if any indvidual had previous year tax audit but now he has not exceeding 1 Crore Rs but his net profit % is 3.90% so what to do to skip tax audit for this year?