Increase in threshold limit for audit for persons having income from profession
Under the existing provisions of section 44AB of the Act every person carrying on a profession is required to get his accounts audited if the total gross receipts in a previous year exceed twenty five lakh rupees.
In order to reduce the compliance burden, it is proposed to increase the threshold limit of total gross receipts, specified under section 44AB for getting accounts audited, from twenty five lakh rupees to fifty lakh rupees in the case of persons carrying on profession.
These amendments will take effect from 1st April, 2017 and will, accordingly, apply to the assessment year 2017-18 and subsequent assessment years.
Clause 25 of Finance Bill 2016
25 of the Bill seeks to amend section 44AB of the Income-tax Act relating to audit of accounts of certain persons carrying on business or profession.
Sub-clause (i) of the said clause seeks to amend clause (b) of the aforesaid section. The said clause provides that every person carrying on a profession is required to get his accounts audited before the specified date if his gross receipts in a previous year exceed twenty-five lakh rupees.
It is proposed to amend the said clause (b) so as to increase the threshold limit to fifty lakh rupees.
Sub-clause (ii) of the said clause seeks to amend clause (d) of the said section so as to provide that in the case of an assessee, who is covered under the new proposed section 44ADA, the audit of books of account is required if he claims that the profits and gains from the profession are lower than the profits and gains computed in accordance with the provisions of sub-section (1) of the proposed new section and if his income exceeds the maximum amount which is not chargeable to income-tax.
Sub-clause (iii) of the said clause seeks to insert a new clause (e) in the said section so as to provide that every person 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, keep and maintain such books of account and other documents for computing his total income in accordance with the provisions of this Act.
These amendments will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017- 2018 and subsequent years.
[Clause 25]
Hi, from what i can read from the finance bill, they have postponed the amendment to section 44AB to increase the limit for tax audit from 1 crore to 2 crores till the budget proposals come for discussion in the parliment. I am sure, it will be done while passing the budget.
This is in the context of amendment to section 44AD.
regards