SECTION 44AA (Audit Reqired)

[MAYUR DODIYA]

DEAR EXPERT

If we are maintaIn Books of Account as per Income Tax Actsection 44AA and our Books profit Show less Than  8 percent can audit reqeired. (as per 44AB)

pls advice

thanks

[Shailesh Doshi]

You have not specified as to whether you are covered u/s 44AD.. If you are excluded by virtue of Section 44AD then you need not get your accounts audited so long as you are not exceeding the limit prescribed u/s 44AB. You are required to get your accounts audited if (a) you claim that your profit from the eligible business is less than 8 percent and (b) your income exceeds thresold limit. Eligible assessee and Eligible business are defined in Explanation to Section 44AD.

[MAYUR DODIYA]

 

Thank you for the reply sir . 

Sir

we are traders and our profit not more than 8 percent and our F.Y.2012-13 Total turnover Less than 1 Cr and we are maintain all Books of Account as per section 44AA.  in that the case can Audit Required.?

 

[Shailesh Doshi]

If you are showing net profit at a lesser percentage than stipulated and if your total income doesn't exceed taxable limit then you are not required to undergo tax audit u/s 44AB. Both the conditions are to be cumulatively satisfied.

[DEV KUMAR KOTHARI]

In case profit or gains computed under the head 'business' after considering all deductions and adjustments like depreciation,  weighted deductions, S. 40.a.ia adjustments, S. 43B adjustments, etc. is less than prescribed percentage and assessee and the business is eligible, then audit is required.

[CAGOPALJI AGRAWAL]

Only partnerships firm having NIL or negative income in this case are not liable for tax audit.

AI Summary

Tax audit requirement applies when presumptive profit falls below the prescribed rate and total income exceeds taxable threshold. Audit under the tax audit provision arises when a taxpayer claiming actual net profit below the presumptive percentage also has total income exceeding the taxable threshold; if excluded from the presumptive scheme and turnover remains under the audit threshold, audit is not required. Profit for this test is computed after allowing all deductions and adjustments, including depreciation and adjustments under provisions such as S.40A(ia) and S.43B. Partnership firms with nil or negative income were noted as generally not liable for audit in the forum responses.