Tax Audit Applicability
Please anyone can let know that whether Tax Audit is applicable to Partnership firm having loss in the F.Y. 2013-14??
A Partnership firm carrying a manufacturing business is having a turnover less than Rs. 1 crores. A firm is having Loss of Rs. 4,00,000/- ( Approx.)..
Firm has not provided Interest & remuneration to Patners.
Should I go for Tax Audit?
Please Advise... urgent..
In your case first refer the section 44ABof Income Tax Act, 1961. Section 44AB mendates the tax audit in case, turnover cross the 1 crore rs.
However another section that comes in picture is section 44AD. As per section 44AD, if the turnover is less than 1crore and declared profit is less than 8%, Tax audit is mendatory.
However you have to also refer the point 5 of section 44AD. Point 5 of section 44AD is presented here for your reference:
(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.
From above point we can understand that in case your total income is in negative you need not to undergo tax audit.
As in your case partnership firm made loss, Tax audit is not applicable.
Thanx for giving me reference Pulkit.
Please also tell me that as I am going to Carry Forward my Loss of the Firm, Does it will make any difference if I don't opt for Tax Audit?
i.e. If I don't go for Tax Audit , Then Can I take Benifit of My c/f Loss in the next year??
Yes subject to your compliance with the other conditions attached to carry forward options.