Thursday, September 27, 2012

TAX AUDIT LIMIT 44AB ENHANCED 60 LAKH TO 100 LAKH ,15LAKH TO 25 LAKH


on Thursday, September 27, 2012

Under 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 the previous year exceed sixty lakh rupees. Similarly, a person carrying on a profession is required to get his accounts audited if the total sales, turnover or gross receipts in the previous year exceed fifteen lakh rupees.

In order to reduce the compliance burden on small businesses and on professionals, it is proposed to increase the threshold limit of 

  1. total sales, turnover or gross receipts, specified under section 44AB for getting accounts audited, from sixty lakh rupees to one crore rupees in the case of persons carrying on business and 
  2. from fifteen lakh rupees to twenty five lakh rupees in the case of persons carrying on profession.


It is also proposed that for the purposes of presumptive taxation under section 44AD, the threshold limit of total turnover or gross receipts would be increased from sixty lakh rupees to one crore rupees.

Year wise limit for section 44AB tax audit from financial year 2009-10 is given here under .Two years back the limit was extended by 50 % 


SR N0
FINANCIAL YEAR
LIMIT (BUSINESS)
PROFESSIONAL
1
2009-10
  40   LAKH
10 LAKH
2
2010-11,2011-12
  60   LAKH
15 LAKH
3
2012-13 ONWARDS
100 LAKH
25 LAKH

These amendments will take effect from 1st April, 2013 and will, accordingly, apply to the assessment year 2013-14 and subsequent assessment years.

However in Few case Tax audit is mandatory even if turnover of Business is up to 100 lakh( One crore)

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  1. This is really absolutely very bad proposal to omit the audit requirement upto 100 Lacs turnover. I cant understand the logic behind it. In one side Govt. is trying to unearth the black money & on the other side exempting the audit requirement upto 100 lacs.

    ReplyDelete
    Replies
    1. on the other side persons less than one crore turnover have to show profit 8 % of the turnover otherwise they have to maintain books of accounts and books must be audited .

      And if you check profit margin of your firms, in most of the case it is under 8 % .So scope of audit has not been reduced

      Delete
    2. Thank you so much for explaining the logic rajan sir, and also thanks to nitin ji for expressing your valuable opinion.

      Delete
  2. very good efforts to small accounts. value of sales has increased 2 times from last two years on same quantum of turnover, it is very good amendment for public but it giving pain to CA's.

    ReplyDelete
    Replies
    1. hahahaha agree with you

      Delete
  3. its very....2 good efforts, last 2 years the turnover has increase value wise not volume wise. it painful for CA's who taken audits.

    ReplyDelete
  4. VERY VERY GOOD.......

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  5. GOOD & EASY FOR ALL

    ReplyDelete
  6. This limits are being increased to reduce the admin work and thus further to save the cost of the government.. This is so illogical that one side u r letting the tax to be evaded by reducing the revenue and on the other side u r trying to cut the cost.. Really a Illogical decision..
    Ujjval Sangtani

    ReplyDelete
  7. look at the small business enterprise ,they have to dole out
    1. audit fees for income tax
    2. vat audit again dole out another fees ,
    so the total expeses comes to around 50,000 from where he has to collect this additonal expenses ??? government runs on FREE MONEY taxed to citizens ................... so the enterprises do not get the money for FREE plus for audit he has to waste time of business tooo .

    Further our PM says money is not growing on trees !!!!!!
    so do it is valid for the small businesses tooooo ..........

    Jai Ho

    ReplyDelete
  8. Can you shear circular from income tax department regarding this extension of limit

    ReplyDelete
  9. Very useful information, hope these limits continue when GST in india comes in.

    ReplyDelete
  10. Could some one help..? Say if a sole proprietor who runs a web design company with a turn over of 1200000/year ( gross)...

    1. How much tax should he pay, ..
    2. Does the 60 lakh limit (44AB) applicable for him..
    3. How can he deduct his expenses like hosting fee, internet charges, etc.
    4. Which ITR form should he use.

    ReplyDelete
    Replies
    1. Tax is payable on income not on sales so pint wise answer is given as under.
      1. First you should calculate your net income after all expenses
      2. Yes , 60 limit applicable however for fy 2012-13 limit is 1 crore.
      3.you should prepare books of accounts and deduct expenses as have incurred to earn the income.
      4.you should file itr-4

      Delete
    2. Thanks.. So if the net income is 1000000/year after deductions . He should only pay tax for 8% (44AB) of that income right? i.e. for 80,000 .

      Delete
    3. No it means that if turnover is one crore then income will be treated as 800000 and according tax will be calculated on 800000

      Delete
    4. Oh OK.. So if the net income is 1000000/year he (sole proprietor) should pay the normal tax rates i.e above 10 lacs, you pay 30% tax right..

      Also can itr-4 can be filed through online by himself or should he contact an auditor?

      Delete
    5. raja babu is absolutely right. but your 12 lach he assumed that one crore 20 lachs .

      Delete
  11. something is misguideing me can any one clear my point ?

    if the limit for a.y 2012-13 is 1 cr.
    if we show sale under 1cr then we have to show 8% profit or we have option to audit.

    is there option tht if our sale is under 1 cr and if we have not shown 8% profit also we have not audit but we have shown profit of 2 lacs then it is admirable, is this right ?

    ReplyDelete
    Replies
    1. The limit for ay 2012-13 is 0 lakh not one crore

      Delete
    2. if you show profit below 8% than you have to do audit compulsory. if you show profit 2 lacs which become lesser than 8% of your turnover than you have to get your accounts audited.

      Delete
  12. if my t/o is 30 lacs and i calculate my profit as my own calculation, the profit is less than 8%, then what is condition weather filling of capital & balancesheet is compulsory or not, if i show only expenses under not mainitng books of accoutn & not show capital account, then what condition stand, pl. reply.

    ReplyDelete
    Replies
    1. you have to prepare books of accounts , if profit is not shown 8 % . Further audit should also be got done from CA .

      so it is better to show 8% profit and that will be only 2.40 lakh and if you save 40000 rs in 80C then no tax liability to pay tax at all.

      Delete
  13. kapil@hotmail.comMarch 19, 2013 at 5:45 PM

    thanks for providing the information

    ReplyDelete
  14. if my turnover is 60 lakhs exact will tax audit be applicable ...at the sections says "exceeds 60 lakh"?

    ReplyDelete
    Replies
    1. as per rule it must be exceed 60 lakh ,so if equal to 60 lakh no audit required.

      further for current year limit is 1 crore

      Delete
  15. What is sale tax quarterly returns due date and what is the penalty for late sale tax?

    ReplyDelete
  16. every month 20th is the last date for monthly VAT returns

    ReplyDelete
  17. i have one query. for pvt ltd company.

    if turnover of sales including packing, freight is under 100 lakhs and if we add sales tax (vat & cst) then it crosses 100 lakhs, shud the pvt ltd company has to go for tax audit?

    ReplyDelete