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Finance

Income Tax Audit: Small Taxpayers or Assumed Income?

The Government of India has implemented a number of schemes to ease the burden on small taxpayers. Furthermore, the individual is not required to keep books of account or have their books of account audited if they have kept them. Conditions for not maintaining books of account or auditing books of account. You can also get some assistance from experts by searching ITR filing near me or income tax filing near me. They are also mentioned in Section 44AB, Section AD, and Section 44ADA. Each one will be discussed in detail. Learn more by reading this blog.

The profession must be one of those listed in Section 44AA. Medical/Legal/Engineering/Architecture/Accountancy/Technical Consultancy/Interior Decoration/Authorized Representation/Film Artist/Company Secretary, and so on. In the previous year, total gross receipts did not exceed Rs 50 lakhs.

Business or Profession Tax Audit Applicability

According to Section 44AB, the following are required to have their books of accounts audited by a Chartered Accountant:

  1. In the case of a Business

Any person engaged in business whose total turnover or gross receipts in any previous year exceeded Rs. 5 crores (applicable from AY 2020-21). This provision, however, does not apply to people who choose the presumptive taxation scheme.

  1. In the case of a Job

Any person who is pursuing a profession and whose gross profits in the previous year exceeded 50 lacs.

  1. A person who is eligible for the scheme of presumptive taxation. Furthermore, who claims that the profits and gains for the respective business are less than what is calculated? Furthermore, it is in accordance with the presumptive taxation scheme and his/her income exceeds the taxable amount.

Note: If a person chooses Section 44AB, he must keep it for the next five continuous assessment years.

4. Section 44AD:

Presumptive Provision for Calculating Business Profits and Gains

According to Section 44AD, the following conditions must be met for non-auditing of books of account:

– The person must be a Resident Individual / HUF / Partnership Firm (not LLP)

– The person must not be covered by Section 44AE, Agency, Commission, or brokerage. In any previous year, the turnover should not have exceeded Rs. 2 crores.

Section 44AD does not apply to the following individuals, who must have their books of account audited:

– Non-Resident

Individual/HUF/Partnership business

– Corporation/LLP/BOI/AOP

5. Section 44ADA:

Special Provision for Presumptive Calculation of Professional Profits and Gains

Professionals, like businesses, are required to keep books of account and have them audited if required by law. They are also not required to have their books of accounts audited. Furthermore, the professional must be a Resident Individual / HUF / Partnership Firm (not LLP).

Final Thoughts

If all of the above conditions are met, the assessee may declare estimated income. Furthermore, this income is derived from the business at a rate of at least 50% of total gross receipts. You can also understand someone in the teaching term. For this, you just need to search on Google for income tax filing near me, and you will find the best place to get assistance. Assessee who claimed deductions under sections 10A/10AA/10B/10BA. Furthermore, the deduction for certain incomes under Chapter VIA in the preceding year.

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