...............IMPORTANT FOR PROFESSIONALS..................: "Computation of Total Turnover for the purpose of Tax Audit ICAI through a Guidance Note clarified the following points: 1. Where a person is carrying on more than one businesses or more the one professions – the total turnover of all the businesses or professions shall be clubbed together and tax audit shall be liable to be conducted if the total turnover exceeds prescribed limits. 2. Where a person is carrying on business as well as profession and the turnover of the business say is Rs. 120 lakhs and the gross receipts of the profession say is Rs. 22 Lakhs. In such a case, ICAI has clarified through a guidance note that the assessee is liable to get the tax audit done of both the business as well as profession because the turnover from the business exceed the limit of Rs. 100 lakhs. However, if his total Turnover say was Rs. 95 Lakhs and gross receipts from profession say was Rs. 22 Lakhs, he would not be required to get his tax audit done. 3. In case where a person has a total turnover of say Rs. 98 Lakhs and has sold a Car for say Rs. 8 Lakhs. In such a case, the total amount on adding up becomes Rs. 106 Lakhs i.e. above Rs. 100 lakhs. Confusion arises whether the person is liable to get an audit done in this case and ICAI has clarified that the turnover will not include any amount on the sale of the fixed asset as it was held by the person for business use and not for the purpose of sale. ICAI has further clarified that the amount received from the following items shall not be included while computing the Total Sales/Total Turnover/ Gross Receipts:- Sale Proceeds of Fixed Assets Sale Proceeds of Assets held as Investments Rental Income Income by way of Interest unless assessable as Business Income Any expense which is in nature reimbursement to the Agent by the Client..." Thanks : CFA NITIN K. MUDGAL
Posted on: Sun, 11 Aug 2013 16:30:12 +0000