What is the tax audit limit for an LLP for FY 2016-17?
For financial year FY 2016-17, the audit will apply to businesses with turnover in excess of INR 2 crore. However, LLPs turnover / total sales / gross receipt level fixed to be greater than Rs.1 crore attracting tax audit provisions u/s 44AB of the Act still prevails but assesses who claim the benefit of section 44AD of the Act can avoid tax audit up to the total turnover limit of INR 2 crores even. Example 1: Alpha Pvt. Ltd. having a total turnover of INR 125 Lakhs for the FY 2016-17 needs to get its books audited u/s 44AB of the Act as turnover has exceeded INR 1 Crore. We all know that company assessee can't avail benefit u/s 44AD of the Act thus threshold limit of INR 1 crore applicable as above. Example 2: Mohanty & Co. (a partnership firm) engaged in trading of electronic goods having a turnover of INR 165 Lakhs for the FY 2016-17 need not to get its accounts audited u/s 44AB of the Act as its turnover has not exceeded Rs. 2 crores (assuming that firm will offer business income u/s 44AD of the Act). However, if the firm opts to be out of presumptive taxation scheme u/s 44AD of the Act it needs to get books audited u/s 44AB of the Act.
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