What is the turn over limit for tax audit? Who needs to get audited the accounts under section 44AB?

Tax Audit Limit Rs. 50 lakhs for Professionals, Rs. 1 Crore for Business and Rs. 2 Crore for those who file Presumptive Income Tax Return in Financial Year 2016-17 onwards.

Those who are carrying on a business or profession will under tax audit law if the turn over of the business or profession exceeds the limited prescribed under Section 44AB. As per this section every person carrying on business or profession is required to get the accounts audited by a chartered accountant before the "specified date" and furnish by that date the report of such audit, if the total sales, turnover or gross receipts exceed Rs.100 lacs in the case of business and gross receipts exceed Rs. 50 Lakhs (Rs.25 lakhs previous year) in the case of profession (clauses (a) and (b) of section 44AB). Assesses who claim benefit of section 44AD of the Act and file presumptive return can avoid tax audit upto the total turnover limit of Rs. 2 crores even in Financial Year 2016-17.

Tax audit limit prescribed till financial Year 2016-17 from 2009-10 is as under:-

 

 

Financial Year Turnover Limit for Business Turnover Limit for Profession
2016-17 200 Lacs for Presumptive Return

100 Lacs for others

 Rs. 50 Lacs
2013-14 to

2015-16

 100 Lacs 25 lacs
2010-11 &

2011-12

 60 Lacs
15 Lacs
2009-10 40 Lacs 10 Lacs

Section 44AB reads as under:-

Every person,-

(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year; or

(b) carrying on profession shall, if his gross receipts in profession exceed twenty-five lakh rupees in any previous year; or

(c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AE or section 44BB or section 44BBB, as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year; or

(d) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year, get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed :

Provided that this section shall not apply to the person, who derives income of the nature referred to in section 44B or section 44BBA, on and from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later :

Provided further that in a case where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under this section.

Explanation. - For the purposes of this section, -
(i) "accountant" shall have the same meaning as in the Explanation below sub-section (2) of section 288;

(ii) "specified date", in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the due date for furnishing the return of income under sub-section (1) of section 139.