Is Tax Audit mandatory if Income less than 8%

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  1. THOTA PAVAN KUMAR

    THOTA PAVAN KUMAR New Member

    A person carrying on Business (retail & Whole sale rice shop) with turn over less than 1 crore and mainting books and disclosed profit as per P & L A/c.declared less than 8 % of turnover.
    Issues :
    1)Is he liable for Tax Audit?
    2).Is he cover under Sec 44 AD?

    My opinion:
    Since he is having less than 1 cr turnover and maintaining books , he is not liable for tax audit..
     
  2. Raunak Gupta

    Raunak Gupta New Member

    In this case, the assessee is an eligible assessee and section 44AD is applicable and 8% would be deemed to be the profits and gains from Business (irrespective of whether he maintains books of accounts or not).

    The assessee cannot show lower profits without the following:-
    1. Maintenance of books of accounts and
    2. Tax Audit u/s 44AB.

    Note that section 44AD is a deemed section and an assessee cannot claim lower profits.
     
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