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Tax Audit Limit U/s 44AB Increased From 25 to 50 lakhs

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Tax Audit Limit U/s 44AB Increased From 25 to 50 lakhs, Tax Audit Limit U/s 44AB Increased for Professionals, Hi Friends in union budget 2016 Tax Audit Limit U/s 44AB increased  from 25 to 50 lakhs for Professionals. Clause 25 of the Bill seeks to amend section 44AB of the Income tax Act relating to audit of accounts of certain persons carrying on business or profession. Now check more details regarding “Tax Audit Limit U/s 44AB Increased From 25 to 50 lakhs” from below….

Tax Audit Limit U/s 44AB Increased From 25 to 50 lakhs

Clause 25 of the Finance Bill 2016

Clause 25 of the Bill seeks to amend section 44AB of the Income-tax Act relating to audit of accounts of certain persons carrying on business or profession.

Sub-clause (i) of the said clause seeks to amend clause (b) of the aforesaid section. The said clause provides that every person carrying on a profession is required to get his accounts audited before the specified date if his gross receipts in a previous year exceed twenty-five lakh rupees.

It is proposed to amend the said clause (b) so as to increase the threshold limit to fifty lakh rupees

Sub-clause (ii) of the said clause seeks to amend clause (d) of the said section so as to provide that in the case of an assessee, who is covered under the new proposed section 44ADA, the audit of books of account is required if he claims that the profits and gains from the profession are lower than the profits and gains computed in accordance with the provisions of sub-section (1) of the proposed new section and if his income exceeds the maximum amount which is not chargeable to income-tax.

Sub-clause (iii) of the said clause seeks to insert a new clause (e) in the said section so as to provide that every person carrying on the business shall, if the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax, keep and maintain such books of account and other documents for computing his total income in accordance with the provisions of this Act.

These amendments will take effect from 1st April, 2017 and will, accordingly, apply in relation to the assessment year 2017- 2018 and subsequent years.

Amendment of section 44AB.

In section 44AB of the Income-tax Act, with effect from the 1st day of April, 2017,—                                

(i) in clause (b), for the words “twenty-five lakh rupees”, the words “fifty lakh rupees” shall be substituted;

(ii) in clause (d),—

(a) for the word “business” wherever it occurs, the word “profession” shall be substituted;

(b) for the words, figures and letters “under section 44AD”, the words, figures and letters “under section 44ADA” shall be substituted;

(c) for the words “previous year”, the words “previous year; or” shall be substituted;

(iii) after clause (d) and before the long line, the following clause shall be inserted, namely:—

“(e) carrying on the business shall, if the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,”.

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One comment

  1. KINDLY EXPLAIN ME, as per under mentioned amendment, whether taxable limit shall be calculated, after including the
    profit of the firm, according to the section 44AD, or without considering the income of the firm, as per section 44AD

    Carrying on the business shall, if the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,”.
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