Income Tax audit is required under section 44ab if turnover, sales or gross receipts cross 1 crore rupees. Section 44AB of Income Tax Act, 1961 reads as:
"If the total sales, turnover or gross receipts in buisness for the previous year(s) relevant to the assessment year exceeds Rs. 1 crore from the assessment year 2013-14 onwards should get the tax audit."
My questions are:
What is the definition of total sales, turnover or gross receipts as per Income Tax Act, 1961?
Whether VAT, Excise or Service tax should be deducted from sales to arrive at total sales, turnover or gross receipts?
Posted 2 years, 2 months ago by Rahul Rai
GROSS RECEIPTS includes every thing. So while calculating Turnover VAT, Excise or Service Tax shall not be deducted and shall be included in computation of turnover.
Better to get audited and file required documents. if you are liable to audit and if you don't get books audited. It will attract penalties etc.
As per ICAI Guidelines VAT, Excise etc. are balance sheet items and shall not form a part of Profit & Loss.
Better to get books audited if the Gross Receipts or Turnover are more than specified limit when it is inclusive of taxes.
But if you can fight and explain and make Assessing officer satisfied then you can wait for time and take a chance
Posted 2 years, 1 month ago by SANJAY KUMAR GANNA
You need to be logged in to reply.