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CA Final · Direct Tax Laws & International Taxation · Tax Audit and Ethical Compliances

Dr. Iyer, a consultant, has professional gross receipts of Rs. 62 lakh in the tax year. Separately, Kiran Enterprises had business turnover of Rs. 80 lakh, with all receipts and payments through banking channels. Under section 63 of the Income-tax Act, 2025, which statement is correct?

Dr. Iyer must get his accounts audited because professional gross receipts of Rs. 62 lakh exceed the Rs. 50 lakh limit. Kiran Enterprises need not, as its business turnover of Rs. 80 lakh is below the Rs. 1 crore limit.

  1. ABoth must get accounts audited
  2. BDr. Iyer must get accounts audited; Kiran Enterprises need notCorrect
  3. CKiran Enterprises must get accounts audited; Dr. Iyer need not
  4. DNeither needs an audit

Explanation

For a profession, audit applies if gross receipts exceed Rs. 50 lakh, so Dr. Iyer at Rs. 62 lakh is covered. The Rs. 10 crore business limit is not relevant to him. Kiran Enterprises has turnover of Rs. 80 lakh, which is under Rs. 1 crore, so no audit applies to it, and the relaxation does not matter.

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