Question ID : 40865

Tax Audit in case of Private Limited Companies

Dear Sir, Is it mandatory to conduct tax audit and give report 3CA-3CD of pvt ltd company even if the turnover is less than 1 crore and company declaring profit less than 8%? Thanks

Answer ID : 80771

Hi, Please refer to section 44AB and 44AD to clear the doubt. As per 44AB, the audit is compulsory if turnover is 1crore (or 50Lakh), but if the eligible person is complying with the provisions of 44AD or 44ADA, then audit is not necessary. Since 44AD section does not cover Private Limited company, then provisions of 44AD are not applicable. Hence 8% profit conditions are not applicable on Pvt Ltd. Therefore even if profit of Pvt Ltd is less than 8%, the audit is governed by section 44AB and audit is applicable only if turnover exceeds the criteria as per section. Profit element is not relevant for Pvt Ltd in present case.

Answer ID : 80784

If turnover of company is less than 1 Crore, tax audit is not required. Section 44AD is not applicable to company.

Answer ID : 80910

not required

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