Applicable audit for sec 44ad assess

Question BankCategory: Income TaxApplicable audit for sec 44ad assess
Kollipara sundaraiah asked 2 months ago

Assess turnover 70 lacs in f.y.19-20. net  profit below 8% Limit.but total income exceed basic exempted limit.assess accounting books maintained regularly.
Question:
1. if assess audit  sec 44ab  applicable in  f.y 19-20.
2.cash receipts and payments 5%limit new clause applicable or not.
 

1 Answers
Rabindra answered 2 months ago

Your turnover is 70 lakh which is less than 44AB limit of 1 crore and 44AD limit of 2 crore..
Hence you are not covered under 44AB directly but you may get covered in 44AB if you are covered in 44AB(e) i.e. only for those who are covered in 44AD(4).
You GTI is also more than Basic exemption limit. Now 
There may be following situations:-

  • You have opted 44AD in any of last four FY and not opting 44AD in FY 19-20 as you are declaring income less than limit of 44AD i.e. 8% /6% of turnover.

In this case , you are covered in 44AD(4) & 44AD(5) and you are required to get the accounted audited as per 44AB(e). and you are also required to maintain books of accounts as per 44AA.

  • You have opted 44AD in any of last four FY and also opting 44AD in FY 19-20 as you are declaring income equal to or more than limit of 44AD i.e. 8% /6% of turnover.

In this case , you are not covered in 44AD(4) & 44AD(5) and you are not required to get the accounted audited and are not also required to maintain books of accounts as per 44AA because you opt for 44AD,

  • You have not opted 44AD in any of last four FY and also not opting 44AD in FY 19-20 as you are declaring income less than limit of 44AD i.e. 8% /6% of turnover.

In this case , you are not covered in 44AD(4) & 44AD(5) and you are not required to get the accounted audited BUT you are required to maintain books of accounts as per 44AA.

  • You have not opted 44AD in any of last four FY and opting 44AD in FY 19-20 as you are declaring income equal to or more than limit of 44AD i.e. 8% /6% of turnover.

In this case , you are not covered in 44AD(4) & 44AD(5) and you are not required to get the accounts audited and you are not required to maintain books of accounts as per 44AA because opted for 44AD.
 
 

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