sec 44AB requirement for below one crore turnover.

[giri gattupalli]

respected sir,

1. one of my client is a partnership firm

2. during AY 2025-26 turnover two crores and got audited under sec 44AB.

3. during AY 2026-27 turnover is 44 lakhs and as per books net profit is 56,000 only. and business also closed.

4. being a partnership firm filing of ITR is mandatory.

5. please suggest whether audit under sec 44AB required to declare actual profit that is 56,000.

please discuss....

AI Summary

Low-profit tax audit requirements can apply when a partnership firm declares actual book profits below presumptive-tax benchmarks.
Audit under section 44AB is recommended where a partnership firm proposes to declare actual book profit that is low in relation to the presumptive-tax framework, even though turnover is below Rs. 1 crore. The low-profit trigger under section 44AB(e), read with section 44AD, requires examination beyond turnover alone. The position depends on verification of the firm's section 44AD history and the nature and composition of its receipts.