Income Tax Audit for Tax Payers or Presumptive Income

To give relief to small or medium sized taxpayers, the income tax act incorporated scheme of presumptive taxation. Under this scheme, the individuals who are running a business are not required to maintain books of account regularly. Individuals who adopt this scheme can declare their income at the rates prescribed in the scheme. They even don’t have to get their accounts audited regularly.
If your turnover in the previous does not exceed ₹2 Crore limit, then you can opt for presumptive taxation. However, for this, it is required the taxpayer to be:

 

    • An Indian Resident

    • Resident HUF

    • Resident Partnership Firm

   
  Threshold Limit     Taxpayers not applicable for Tax Audit
  ₹50 Lakhs     If Assessee has opted for Section 44ADA.
  ₹75 Lakhs     If Assessee has opted for Section 44ADA & Cash receipts are up to 5% of total income.  
  ₹1 Crore     If the Assessee has opted for Section 44AD or has shown profit below the basic exemption limit.  
  ₹2 Crore     If Assessee has opted for Section 44AD
  ₹3 crore     If Assessee has opted for Section 44AD & Cash receipts are up to 5% of total income.  
  ₹10 Crore     Cash receipts and Cash payments are up to 5% of total income.
   

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