CA Eresh Dalal

Article contains Matrix for Tax Audit Requirement Under Section 44AB for A.Y.2020-21. Matrix has been prepared after considering provisions of section 44AB and 44AD for A.Y.2020-21

TAX AUDIT CONCEPT ON BLACKBOARD

Matrix for Tax Audit Requirement Under Section 44AB for A.Y.2020-21

Sr. No. Assesse Status Turnover Income Exceeds Basic Exemption limit Profit above 8% / 6% (assumed that assesse was opting 44AD till A.Y. 2019-20) Amount received /paid in cash of total receipts / payment exceeds 5% Required for audit U/s 44AB Reasons
1 Individual /UF / Firm Less Than 1 Corers Yes Yes NA No

 

 

Since return filed U/s 44AD
2 Individual / HUF /Firm Less Than 1 Corers Yes no NA Yes

 

 

Since Opted out of 44AD for the first time and will have to get its account audit for next 5 years as benefit of 44AD will not be available for 5 years

 

Note : In this case if this is first year of business no audit will be required since assesse never opted for 44AD in preceding Year.

 

3 Individual / HUF / Firm Less Than 1 Corers No Yes/No NA No

 

 

Since Income is below taxable Limit and turnover is also less than Rs.1 corers.
4 Individual / HUF / Firm More than 1 Corers and upto 2 Corers Yes Yes Yes No Provisions of section 44AB does not apply to persons opting for 44AD even though cash receipt / payment exceeds 5% of total total receipts or payment( Proviso 1 to section 44AB)
5 Individual / HUF / Firm More than 1 Corers and upto 2 Corers Yes No No/Yes Yes Since Opted out of 44AD for the first time and will have to get its account audit for next 5 years as benefit of 44AD not available for 5 years

 

6 Individual / HUF / Firm More than 1 Corers and upto 2 Corers Yes yes No No As per provision of 44AD
7 Individual / HUF / Firm More than 1 Corers and upto 2 Corers No Yes yes No Since Income is below taxable limit and provision of 44AB does not apply to person opting for 44AD
8 Individual / HUF / Firm More than 1 Corers and upto 2 Corers No No Yes yes Though Income is below taxable limit as assesses has opted out of 44AD and normal provision of 44AB applicable.

 

Since cash receipt / payment is more than 5% of aggregate receipt and payment and turnover is less than 5 corers.

8 Individual / HUF / Firm More than 2 corers and upto 5 corers NA NA No No Since cash receipt / payment is less than 5% of aggregate receipt and payment and turnover is less than 5 corers.
9 Individual / HUF / Firm More than 2 corers and upto 5 corers NA NA Yes Yes Since cash receipt / Payments is more than 5% of aggregate receipt and payment and turnover is more than 1 Corers and less than 5 corers
10 Company/ LLP More than 1 corers and upto 5 corers NA NA Yes Yes Since cash receipt / Payments is more than 5% of aggregate receipt and Payments and turnover is more than 1 Corers
11 Company / LLP

 

More than 1 corers and upto 5 corers NA NA No No Since cash receipt / Payments is less than 5% of aggregate receipt and Payments and turnover is less than 5 corers.
12 All assesse More than 5 Corers NA NA NA yes Since Turnover exceeds Rs. 5 corers

More Under Income Tax

2 Comments

  1. PP says:

    Sir
    Would like to know if I have total income ( contains income from salary and Other sources) exceeding Basic Exemption Limit and have Loss from Intra-day trade of shares.
    I have shown the Rs. 25000/- Turnover of Intra-day( as per rules) under speculative business and have claimed loss of Rs. 4250.
    Whether I require to get my books tax audited for showing loss under Intra-day trade.
    Please guide.

  2. MALLINATH NAINEGLI says:

    Too good a matrix of ready reference covering company assessees as well which often gets skipped in the discussions. Brilliant simplification.

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