New Delhi: The Finance Ministry on Monday said small businesses with a total turnover of up to Rs 2 crore will not be required to get their accounts audited if they opt for the presumptive taxation scheme.
“The higher threshold (up to Rs 2 crore) for non-audit of accounts has been given only to assessees opting for presumptive taxation scheme under section 44AD,” the ministry said in a statement.
Section 44AB of the Income Tax Act makes it obligatory for every person carrying on business to get his/her accounts of any previous year audited if his/her total sales, turnover or gross receipts exceed Rs 1 crore.
“However, if an eligible person opts for presumptive taxation scheme as per section 44AD(1) of the Act, he shall not be required to get his accounts audited if the total turnover or gross receipts of the relevant previous year does not exceed Rs 2 crore,” the statement said.
Finance Minister Arun Jaitley in his Budget for 2016-17 had proposed to increase the turnover limit under the presumptive taxation scheme under section 44AD of the Income Tax Act to Rs 2 crore “which will bring big relief to a large number of assesses in the MSME category”.
Mr Jaitley had said that if the taxpayer opts for the presumptive taxation scheme, he has to remain in that scheme for 5 years.