THRESHOLD LIMIT FOR 44AB TAX AUDIT FOR FY 2019-20

[MVK TAXAUDIT]

WHAT IS THE THRESHOLD LIMIT FOR 44AB TAX AUDIT FOR FY 2019-20. WHETHER IT IS 1 CRORE OR 5 CRORE. WHAT IS THE PROFIT PERCENTAGE THAT HAS TO BE DECLARED IF IT IS 5 CRORE?

[PAWAN KUMAR]

dear sir,

the turnover is now 5 crore in previous year.

profit percentage is 8 for non-digital transaction, 6 percentage for digital transaction.

[CASusheel Gupta]

Tax Audit limit is ₹ 1Crore.

For turnover up ₹ 2 crore, declare profit 6%/8% and no need for tax audit.

If turnover exceeds ₹ 2 Crore, pay tax on actual profit but only if condition of 95% of payment and collection is met and no need for tax audit.

CA Susheel Gupta

AI Summary

Tax audit threshold debate: differing views on turnover limits, presumptive profit rates and digital payment condition. Practitioner responses conflicted on the section 44AB audit threshold for FY 2019-20: one asserted a higher turnover limit and set presumptive profit percentages for non-digital and digital transactions; another maintained a lower audit threshold, explained that presumptive profit rates apply up to an intermediate turnover band without requiring audit, and that above that band taxpayers must be taxed on actual profit only if the condition concerning the proportion of payments and collections is satisfied.