Clarification on Tax Audit requirement for the persons whose turnover does not exceed 10 Crore
Section 44AB
Every person carrying on business, whose turnover does not exceed Rs. 10 Crore, is not required to get their books of accounts audited subject to following conditions:
a. Aggregate of all amount received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed 5% of all receipt.
AND
b. Aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed 5% of the all payments.
If any payment or receipt, as the case may be, by a cheque drawn on a bank or by a bank draft, which is not account payee, shall be treated as payment or receipt in cash.
Section 44AD
An eligible assessee (Individual, HUF or Partnership Firm – resident), whose Turnover does not exceed Rs. 2 Crore may declare profit at least 8% (in case of business through cash) or 6% (in case of business through other than cash).
Section 44AD is not applicable to
a. Professionals,
b. Persons earning income in the nature of commission or brokerage
c. Person carrying on any agency business
d. Person carrying on business of plying, hiring or leasing goods carriages referred in section 44AE.
Due Dates
Due date to file return of Income (in case of other than tax audit): 31/12/2021
Due date of Tax Audit: 15/01/2022
Due date to file return of Income (in case of Tax Audit): 15/02/2022
Author Bio
Hi,
My proprietorship firm doesnot exceed 10 cr annual turnover and my cash transactions are under 5%. Do I need to hire a CA or can I file my own income tax returns?
I am trying to file ITR 3 intending to show 6% profit on my Digital sale of Rs 3.5 crore. But always stuck on col Gross receipts which says you are not eligible to avail the provisions of 44AD since your gross rec exceeds 2 crore. How to proceed?
You have to file ITR-3 Form, in which you have to fill full balance sheet.
itr 3 not getting uploaded for want of tax audit report even in cases of less than ten crore turnover
Please ask properly. I did not understand what do u want to know.
speculative loss 40 lakhs on share trading turnover of rs 2.6 crores was shown in itr 3. in the end, it shows no errors found but when we go for validation, system says return will not be uploaded since loss was shown in “no account cases” but p&l a/c and balance sheet tax audit report not attached
First you have to check that the turnover, you are taking, is correct. Because as per income tax the definition of turnover for speculation business on shares is different.
If your Turnover is correct, then as per 44AD you have to declare profit less than 8% (in cash transaction) or 6% (other than cash transaction) , otherwise tax audit will be require as per 44AB(e).
* profit less than = profit not less than…by mistake type
many many thanks, shri ankit clarifying speculative turnover exclusivity for tax audit. a deeper study shows equity f n o turnover will be treated as busines loss/gain and equity trading will be treated speculative business. i will calculate f n o turnover separately and try. regards
Explained in a good manner
What about the professionals the section applicability
The above content is not applicable to professional.