Pawan Singhal (chartered accountant) (655 Points)
16 February 2011PLZ CLERIFY :-OUR TURNOVER IS 50 LAKH AND WE DECLARED INCOME AS 1 LAKH ON THESE TURNOVER. OTHER SOURCES INCOME IS Rs. 20 THOUSAND. SO ASSESSE TOTAL INCOME DURING THE A.Y 2011-12 IS Rs.1.20 LAKH. NOW QUESTION IS AS IS HE REQ AUDIT AS PER SEC 44 AD BECAUSE HE HAS DECLARED PROFIT LESS THEN 8% OR HE HE IS NOT REQ AUDIT BECAUSE HIS TOTAL INCOME IS LOWER THEN TAXABLE INCOME AS PER SECTION 44AD.
NOW WHAT TO DO FOR A.Y 2011-12.
CA. ANKUR JAIN
(CA.....)
(2800 Points)
Replied 16 February 2011
Pawan Singhal
(chartered accountant)
(655 Points)
Replied 17 February 2011
then what is the means of second pera of 44ad whare assesse required audit if his total income exceed the exemption limit. means B.P INCOME + OTHER SOURES INCOME . Then he is required to tax audit.
Pankaj Arora
(Learner)
(3134 Points)
Replied 17 February 2011
You don’t need to audit u/s44ad because for A.Y. 11-12 audit limit is 60Lakh and you’re your turnover is below from this limit.
Sadre Alam
(gf)
(55 Points)
Replied 17 February 2011
A person can claim that his income is lower than 8%(Subject to section 44AD) subject to obligation of maintainig accounts and have these account audited. so account must be audited if assessee claim that his income is less than specified amount..and does not matter whether his total income is covered under exemption limit.
shreyas shah
(CHARTERED ACCOUNTANT)
(24 Points)
Replied 19 February 2011
Sir,
But isnt this scheme optional , i.e only if the assessee wishes to opt for this scheme he would have to get the books of accounts audited if he declares lower profit.
If he is maintaing his books of accounts and claiming deduction u/s 28 to 43C he is not liable for Presumtive taxation option and he can declare lower or higher income w/o getting his books of accounts audited.
Pls correct me if i am wrong ..
Sadre Alam
(gf)
(55 Points)
Replied 19 February 2011
Yes this is optional.........if the assesse calculate the income @ 8% then there is no requirement of audit(if turnover is less than 60 lacs)....but when assesse claim that his income less than 8% then account must be audited whether turnover is 60 lacs or not...........
Pawan Singhal
(chartered accountant)
(655 Points)
Replied 19 February 2011
my point is not that audit is mandetory or not if profit is 8%. but question is that if Total Total income also below then taxable income and assesse is declaring profit below 8% on turnover u/s 44AD . then audit is required or not.
mY VIEW IS THAT AUDIT IS NOT REQUIRED BECAUSE HIS INCOME IS LOWER THEN TAXABLE INCOME.ALTHOUGH HE IS DECLARING LOWER PROFIT U/S 44AD
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 19 February 2011
Pawan,
First of all sec 44AD has been specifically told that if u claim ir prfit/ gain lower than the presumptive 8% of the total turnover, then u required to get the acounts audited. The requirement of audit is absolute and there is no exception mentioned anywhere in sec 44AD that if ur total income is lower than exemption limit, u would not required to get the done done. So even if u r showing loss which means ur income is negative, u required to get the audit done.
Government has stipulated a standard margin based on which u would calculate ur net profit and pay taxes accordingly. Even if ur net profit is higher than 8% (even u earning 100% net profit), govt has given u liberty to disclose net profit @ 8% only. No questions would be asked if u r earning 100% net profit and disclosing only 8% for tax since govt has given u thatbenefit. but if u disclose less than 8% margin, u would required to get audit done u/s 44AA.
Hope this solves ur query..
Regards,
Manoj
Pawan Singhal
(chartered accountant)
(655 Points)
Replied 21 February 2011
manoj.
read this of section 44ad
The assessee has to get the accounts audit if the following two conditions are satisfied:-
1. his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and
2. Whose total income exceeds the maximum amount which is not chargeable to income-tax.
Here see both the conditions are simultaneous and the assessee required to get his accounts audit only if his profits from the business u/s 44AD are lower than 8% of this turnover and further his total income is more than maximum amount which is not liable to tax.
as per my view and as said in section 44Ad.
Rajiv Baldi
(CA Practice )
(11 Points)
Replied 03 June 2011
Pawan
You are right, If the total income is more than maximum amount which is not liable to tax than only he is liable for audit otherwise no audit is required although income shown is less than 8% u/s 44AD.
But I had a point that if a person has Turnover of Rs. 30,00,000/- Lacs and shows net income of Rs. 2,00,000/- and if an investment is made u/s 80C for Rs. 50,000/- than would he be able to claim such benefit as written above because his net income is below taxable limit.
A.LAKSHMI NARASIMHAN
(TAX CONSULTANT)
(41 Points)
Replied 28 July 2011
My view is that audit has to be done only the condition specified u/s44AD is fullfilled.That is both the conditions are simultaneous if his profits is less that 8% of the turnover and his total income is more than the maximum limit which is not liable to tax.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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