tax audit applicability

[Guest]

Dear Expert,

An Asseessee has a TO of 90L, his net pft <6/8%,Is he required to get his BOA audited under 44AB? without opting for 44AD can he still file ITR-3 WITHOUT AUDIT REPORT?

If so under which clause of 44AB?

As there is an amendment in clause e where previously it use to be business and now it is profession from 1/04/2017.

³²Every person,-

(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year ; or

(b) carrying on profession shall, if his gross receipts in profession exceed ³³[fifty] lakh rupees in any previous year; or

(c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AE or section 44BB or section 44BBB, as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year; or

(d) carrying on the ³⁴[profession] shall, if the profits and gains from the ³⁴[profession] are deemed to be the profits and gains of such person under ³⁵[section 44ADA] and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his ³⁴[profession] and his income exceeds the maximum amount which is not chargeable to income-tax in any ³⁶[previous year; or]

³⁷[(e) carrying on the business shall, if the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,]

34. Sub. for 'business' by Act No. 28 of 2016, (w.e.f. 1-4-2017).

35. Substituted for 'section 44AD' by Act No. 28 of 2016, (w.e.f. 1-4-2017)

[DR.MARIAPPAN GOVINDARAJAN]

Your query is not clear.

[Yash Jain]

Dear Sir,

If you want to disclose income less than 6% (full bank tran) or 8% (cash + bank), then you will have to mandatorily get tax audit done. If company file ITR 6 else, ITR 3

However if you want to avoid tax audit, then disclose income as 6% & 8% and take benefit of presumptive taxation U/s 44AD. File ITR 4.

As turnover is more than 20 lakhs, you will have to register for GST. As per provisions of gst you have to file annual return, and get books of account audited. You will have to give reco of Annual revenue in books V/s Gstr1. Hence you have to get books audited.

Audit will cost you, but it will protect you at time of assessment/scrutiny. Hence please get books audited

Rgds

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Yash

[Mayank Saraogi]

Mr Akhil u are absolutely correct, after the amendment by the finance act 2016, if u are maintaining books of accountants u r not required to get ur accounts audited u/s 44AB.

AI Summary

Tax audit applicability: presumptive taxation allows avoiding audit when declared profits meet prescribed thresholds and compliance conditions. An assessee with turnover of ninety lakh and declared net profits below presumptive percentages faces a tax audit requirement under section 44AB unless the assessee opts into the presumptive taxation scheme and declares profits at the prescribed rates; the 2016 amendment replaced certain references from business to profession effective 1 April 2017. GST registration and annual return obligations may also trigger bookkeeping reconciliation and a separate audit requirement, and obtaining a tax audit can provide documentary protection during assessments.