Saturday, February 27, 2010

TAX AUDIT LIMIT 44AB ENHANCED 40 LAKH TO 60 LAKH ,10 LAKH TO 15 LAKH


on Saturday, February 27, 2010

Update : Limit has been proposed to Increased to 60 lakh to one crore and 15 lakh to 25 lak from Financial year 2012-13 ay 2013-14 read here 
AUnder the existing provisions of section 44AB, every person carrying on business is required to get his accounts audited if the total sales, turnover or gross receipts in business exceed forty lakh rupees in the previous year. Similarly, a person carrying on a profession is required to get his accounts audited if the gross receipts in profession exceed ten lakh rupees in the previous year.

In order to reduce compliance burden of small businesses and professionals, it is proposed to increase the aforesaid threshold limit from forty lakh rupees to sixty lakh rupees in the case of persons carrying on business and from ten lakh rupees to fifteen lakh rupees in the case of persons carrying on profession.


BIn view of the amendment proposed above, it is also proposed to increase the maximum penalty, leviable under section 271B for failure to get accounts audited under section 44AB or to furnish a report of such audit, from one lakh rupees to one lakh
fifty thousand rupees.

CIt is also proposed that for the purpose of presumptive taxation under section 44AD, the threshold limit of total turnover or gross receipts would be increased from forty lakh rupees to sixty lakh rupees.
D. Further penalty on non compliance of audit provisions u/s 271B has also been increased to Rs 1,50000/- from Rs 1,00000 earlier

These amendments are proposed to take effect from 1st April, 2011 and will, accordingly, apply in relation to the assessment year 2011-12 and subsequent years.
RELATED CLAUSES REPRODUCED HEREUNDER
14. In section 44AB of the Income-tax Act, with effect from the 1st day of April, 2011,—
 (a) in clause (a), for the words “forty lakh rupees”, the words “sixty lakh rupees” shall be substituted;
 (b) in clause (b), for the words “ten lakh rupees”, the words “fifteen lakh rupees” shall be substituted.
 15. In section 44AD of the Income-tax Act [as amended by section 20 of the Finance (No. 2) Act, 2009], in the Explanation, in clause (b), in sub-clause (ii), for the words “forty lakh rupees”, the words “sixty lakh rupees” shall be substituted with effect from the 1st day of April, 2011.
50. In section 271B of the Income-tax Act, for the words “one hundred thousand rupees”, the words “one hundred fifty thousand rupees” shall be substituted with effect from the 1st day of April, 2011.