Indudhar (Tax Advocate) (427 Points)
22 September 2011Friends...
A partnership firm having Rs 50 lakhs TO maintained books of accounts has the following figures
Fixed Remuneration - Rs 150000-
Interest on capital @ 12% - Rs 200000-
Net Firm Profit -Rs 100000-
TOTAL > 8% of TO -Rs 450000-
Whether the firms books of accounts need to be audited or not?
please guide me ugently as I have less time to take action..
Thanks a lot in anticipation....
Dintakurthi Tirumala
(CA FINAL)
(15994 Points)
Replied 22 September 2011
No need to do audit. For parnership firms remunaration to partners allowable as deduction from profit computed as per section 44AD. In your case book proft is 250000 i.e. maximum allowable remunaration is Rs.150000. so now 44AD profit is Rs.250000(8% on Rs.50 lacs - 150000) but your profit as per books is Rs.100000 which is less then profit as per section 44AD. If you want to offer lower profit i.e as per your books then you shall be audited your books. I think you have an idea for professional for tax audit limit is Rs.1500000 either firm or individual. I think your partnership firm is under business catageroy not a professional catageroy.
OM SAI SRI SAI JAI JAI SAI
Rachit
(Ca-Final Article.)
(565 Points)
Replied 22 September 2011
| Originally posted by : Dintakurthi Tirumala | ||
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No need to do audit. For parnership firms remunaration to partners allowable as deduction from profit computed as per section 44AD. In your case book proft is 250000 i.e. maximum allowable remunaration is 150000. so now 44AD profit is 250000(8% on 50 lacs - 150000) but your profit as per books is 100000 which is less then profit as per section 44AD. If you want to offer lower profit i.e as per your books then you shall be audited your books. I think you have an idea for professional for tax audit limit is 1500000 either firm or individual. I think your partnership firm is under business catageroy not a professional catageroy. OM SAI SRI SAI JAI JAI SAI |
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Agree with him....
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