Question ID : 29611

IF TURNOVER IS LESS THAN ONE CRORE AND NET PROFIT IS LESS THAN 8% THEN IS AUDIT U/S 44AB APPLICABLE?

BEFORE FINANCE ACT 2016, AUDIT WAS TO BE CARRIED OUT EVEN IF THE TURNOVER WAS LESS THAN RS.1 CRORE IF NET PROFIT IS LESS THAN 8, PROVIDED THAT GROSS TOTAL INCOME EXCEEDS BASIC EXEMTION LIMIT. IS THIS THE SAME SITUATION AFTER FINANCE ACT 2016. PLEASE GUIDE ON THE SAME.

Answer ID : 65587

YES

Answer ID : 65592

yes it is same exempt if the sale consideration is received through online mode then net profit limit is 6 instead of 8.

Answer ID : 65599

IF TURNOVER IS LESS THAN 1 CRORE AND IF YOU OPT FOR 44AD PRESUMPTIVE SCHEME I.E., TO TAX INCOME @8 OF TURNOVER THEN AUDIT US 44AB IS NOT APPLICABLE.

Answer ID : 65600

THANK YOU. BUT STILL THERE SEEMS TO BE CONFUSION ON THIS. Extract from Expalnatory Statement of Finance Act which reads as follows "The existing provisions of section 44AD of the Income-tax Act provide for a presumptive taxation scheme for an eligible business. Where in case of an eligible assessee engaged in eligible business having total turnover or gross receipts not exceeding rupees one crore, a sum equal to eight per cent of the total turnover or gross receipts, or as the case may be, a sum higher than the aforesaid sum shall be deemed to be profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession". Under the scheme, the assessee will be deemed to have been allowed the deduction under sections 30 to 38 of the Income-tax Act. Further, the eligible assessee can report income less than the deemed income of eight per cent of the total turnover or gross receipts not exceeding rupees one crore provided he maintains books of accounts as per section 44AA of the Income-tax Act" So after reading the above and amended section 44AD there is confusion regarding applicability.

Answer ID : 68687

Combined reading of section 44AB and 44AD gives assessee the following options 1. Declare 8 or 6 percentage of gross turnover or gross receipts as profit and need not comply with section 44AB. or 2. Declare less than 8 or 6 percentage of gross turnover or gross receipts as profit and comply with section 44AB. If the assessee declares less than the specified percentage of gross turnover or gross receipts as profit under section 44AD, books of accounts need to get the books of accounts audited under section 44AB.

---