Govt raises turnover threshold for income tax audit of msme in budget 2020

Govt raises turnover threshold for income tax audit of msme in budget 2020

Under section 44AB of the Act, every person carrying on business is required to get his accounts audited, if his total sales, turnover or gross receipts, in business exceed or exceeds one crore rupees in any previous year. 

In case of a person carrying on profession he is required to get his accounts audited, if his gross receipt in profession exceeds, fifty lakh rupees in any previous year.

In order to reduce compliance burden on small and medium enterprises, threshold limit is increased for a person carrying on business from one crore rupees to five crore rupees in cases where,-

  (i) aggregate of all receipts in cash during the previous year does not exceed five per cent of such receipt; and
  (ii) aggregate of all payments in cash during the previous year does not exceed five per cent of such payment.