Tax audit Matters
MPR Sanjay Kumar (3106 Points)
27 July 2022In tax audit they tells 8% 5% 6% determine of Profits....How to apply ??could you please give me an some examples....
% means of turnover ??
MPR Sanjay Kumar (3106 Points)
27 July 2022
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(171414 Points)
Replied 27 July 2022
Yes, % means percentage of turnover to arrive at profit margin in case of sec. 44AD
For its detail working refer:::
https://www.caclubindia.com/forum/-which-percentage-use-591290.asp
Similarly for specified professionals it is 50% of total receipts.
Now, sec. 44AB specifies limit for tax audit in case of business as 1 Cr. or 10Crs.
If the cash receipts & payments are less than 5% of total receipts/ payments, then the limit is 10 Crs., otherwise it is just 1 Cr.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(171414 Points)
Replied 27 July 2022
For any cash expenditures & cash receipts less than 5%, tax audit applicable only if turnover exceeds 10 Crs.
MPR Sanjay Kumar
(3106 Points)
Replied 27 July 2022
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(171414 Points)
Replied 27 July 2022
5% is only for tax audit applicability.
Do not get confused over its profit margin.......
when sec 44AD is applied....... ( applicable only if maximum turnover upto 2 Crs)
On cash turnover minimum 8% is profit margin &
over bank transactions/turnover minimum is 6%.....
chaithra
(CA final)
(71 Points)
Replied 27 July 2022
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