Tax audit limit enhanced by Finance Bill 2012-13 . It is good news for all as the limit up to which a person can file tax return u/s 44AD has been enhanced to 1 Crore . Along with this good amendment, the limit for turnover upto which tax audit is not required has also been enhanced to 1 Crore.
Under the existing provisions of section 44AB, every person carrying on business is required to get his accounts audited if the total sales, turnover or gross receipts in the previous year exceed sixty lakh rupees. Similarly, a person carrying on a profession is required to get his accounts audited if the total sales, turnover or gross receipts in the previous year exceed fifteen lakh rupees.
Turnover for tax audit of Business & profession increased
Finance Bill 2012-13 has proposed to increase the threshold limit of total sales, turnover or gross receipts, specified under section 44AB for getting accounts audited, from sixty lakh rupees to one crore rupees in the case of persons carrying on business and from fifteen lakh rupees to twenty five lakh rupees in the case of persons carrying on profession.
Increase in turnover u/s 44AD for tax audit
It is also proposed that for the purposes of presumptive taxation under section 44AD, the threshold limit of total turnover or gross receipts would be increased from sixty lakh rupees to one crore rupees. These amendments will take effect from 1st April, 2013 and will, accordingly, apply to the assessment year 2013-14 and subsequent assessment years.
I feel this is a good move by finance ministry regarding tax audit.