What if turnover is less than 1 crore?

The assessee will not be required to get his books of account audited in first year of business if his turnover is below Rs. 1 crore and he not opts for sec 44AD in such previous year. 25 Lakh or his profits are likely to exceed Rs. 2.5 Lakh.

What is the turnover limit for tax audit for FY 2020-21?

According to the provisions of the income tax department, taxpayers are mandated to get their accounts audited if the sales, turnover or gross receipts of business exceed ₹ 10 crore. If a taxpayer is a professional, the limit was over ₹ 50 lakh in 2020-21 (assessment year 2021-22).

Is tax audit mandatory for business loss?

It depends on several conditions, If Loss occurred and Total Taxable Income is below threshold limit (2.5 lakh for non senior citizen and 3 lakh for senior citizen), No Tax Audit required. If Loss occurred in Business and Total Taxable Income exceeds threshold limit, Tax Audit required.

What if profit is less than 8?

(a) If total income is less than Basic Exemption Limit : The assessee can claim less than 8\% / 6\% net profit without audit and accounts liability. The assessee can claim less than 8\% / 6\% net profit with audit and accounts liability.

Is audit required if turnover is less than 1 crore?

As per existing law, if the annual turnover is less than 1 Cr during any financial year, the accounts are not required to get audited irrespective of profit percentages.

For which purpose sole proprietor may not get his accounts audited?

Auditing – Audit of Sole Proprietary Concern There is no obligation for a sole proprietor under any law to get the accounts except in case where the turnover of a proprietary business in any financial year exceeds One Hundred Lacs Rupees and gross receipt from profession exceeds Twenty-five Lacs Rupees.

What means turnover?

Turnover is the total sales made by a business in a certain period. It’s sometimes referred to as ‘gross revenue’ or ‘income’. This is different to profit, which is a measure of earnings. It’s an important measure of your business’s performance.

Is tax audit applicable if turnover is less than 1 crore?

If the total sales, turnover or gross receipts does not exceed Rs 2 crore in the financial year, then tax audit will not apply to such businesses.

Is GST included in turnover for tax audit?

As per Section 145A, GST is required to be included in the valuation of turnover for the limited purpose of determining income chargeable to tax and not for the purpose of determining turnover.

What is Section 44AD?

Section 44AD is a presumptive taxation scheme that was introduced by Income Tax Law in order to ease the tax burden on small taxpayers or assessees. Individuals who come under the provisions of this scheme need not maintain or show books of account, nor are they required to get an audit performed on the same.

How much turnover is required for a company to be audited?

If Turnover is more than 1 Cr then even in the case of loss the Firm is subject to Tax Audit u/s44AB (1) & the above limits shall be read as Rs 5 Crores provided other conditions laid down by Finance Act,2020 have been complied with.

Is audit mandatory for a company with less than 1 crore?

As discussed earlier audit is not mandatory if turnover is less than 1.00 crore, you have to file return (dully filled with Balance Sheet and Profit and Loss account) u/s 139 (9) of Income Tax Act.

How much turnover/receipts are required to avoid tax audit U/s 44AD?

So in simple words, If your annual gross turnover/receipts from business exceeds Rs. 1 Crore, you need to be audited u/s 44 AB. But you may avoid tax audit u/s 44AD if your annual gross turnover/receipt is below 2 Crore.

What is the tax audit limit in the case of profession?

Tax Audit Limit in the case of a Profession: Rs.50 Lakh. It means an assessee needs to be audited under Sec 44AB if his annual gross receipts in profession exceed Rs. 50 Lakh. This tax audit limit is applicable from F.Y. 2016-17 (A.Y. 2017-18) What is the Presumptive Taxation Scheme under Sec 44AD of the Income Tax Act?