can any one clarify my doubt about applicability of tax audit for the Financial Year 2012-13


1. Mr. A Has total turnover of Rs. 80,00,000/- but he dont want to get his Accounts to be audited.

further Mr. A says that, he is not willing to pay tax more than Rs. 10,000/-.


2. Mr. A has one more business seperate to above mentiond business in which he has turnover of Rs. 8,50,000/- & incurred loss of Rs. 2,16,500/-.


If Mr. A declares profit more than 8% on the business No.1 no need to get his accounts audited, & if he settoff loss of Business No.2 with Business No.1, is there audit applicable.??


Posted 3 years, 10 months ago by MANOJ SHARMA

Considering the facts represented

Answering 1.  If the Total Turnover for the FY 2012-13 is Rs. 80 Lakhs (AY 2013-14), the requirement of Audit under section 44 AB does not arise.

The taxation will fall under the purview of pressumptive tax if the assessee is involved in construction business. The percentage prescribed is 8% of turnover. No further deductions are allowed. 8% of Turnover over Rs. 80 lakhs computes to Rs. 6.40 Lakhs. If assesse claims the profits to be less than 8 % prescribed tax audit becomes necessary and provisions of section 44AA and 44 AB will apply mutatis mutandis without any deviation.


Answering 2. Business with results Rs. 8. 50 Lakhs and Rs. 2.16 Lakhs accordingly to other business, the requirement is same, as the maintenance of books of accounts is business wise and not all put together.

As the mechanisum to access the profits is business wise, the set off mechanisum is a separate provisions which apply while filing the return and not other wise for applicability of the section 44 AB



CA.Sundeep S Kamath


Posted 3 years, 10 months ago by CA Sundeep Kamath

thanx alot Sandeep Sir.

this answer is completly satisfactory for the asked question. again thank you.


Posted 3 years, 10 months ago by MANOJ SHARMA

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