Sunday 25 December 2016

Threshold Limit of Turnover/ Gross Receipts for Presumptive Taxation / Clarification regarding section 44AD

Threshold Limit
Turnover/Gross Receipts

Presumptive Taxation 

Threshold Limit of tax audit under section 44AB and section 44AD

Where in budget there is, Increase in the turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act to 2 crores to bring big relief to a large number of assessees in the MSME category.

Which is further clarified by press release, as under

Section 44AB of the Income-tax Act (‘the Act’) makes it obligatory for every person carrying on business to get his accounts of any previous year audited if his total sales, turnover or gross receipts exceed one crore rupees.( Old provision of law says)
However, if an eligible person opts for presumptive taxation scheme as per section 44AD(1) of the Act, he shall not be required to get his accounts audited if the total turnover or gross receipts of the relevant previous year does not exceed two crore rupees. (Now)

The higher threshold for non-audit of accounts has been given only to assessees opting for presumptive taxation scheme under section 44AD.


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