Audit of Accounts

[Nitika Patni]

U/S 44AB of Income Tax Act it is mandatory to get accounts audited if gross sales turnover or gross receipts exceed Rs 40 Lakhs. I want to know whether while calculating the gross receipts or gross sales the amount of Service Tax is to be included or excluded. Experts opinion is urgently required. Please help. Nitika.

AI Summary

Debate on Service Tax Inclusion in Gross Receipts for Audits under Section 44AB of Indian Income Tax Act. A query was raised regarding whether service tax should be included when calculating gross receipts or sales for mandatory account audits under Section 44AB of the Indian Income Tax Act. Two experts responded. One stated that service tax should not be included in turnover calculations, provided it is not shown as part of gross sales. The other expert clarified that service tax is diverted at source upon collection and should not be considered as trading receipt or gross turnover, advising it be shown separately in bills and accounts.