What if tax audit is required but we don't want to have that?

If I understand correctly for FY 20-21 (assessment year 21-22) if turnover is less than 5 crore and net profit(income) from trading is less than 6% of turnover - one needs to have audit but is there any escape from this? I mean instead of paying to CA for audit and headaches of documents…can we choose to pay little higher tax ?
If yes please explain how? @Quicko

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If you are willing to declare more than 6% profit, no audit may be necessary, depending on ur turnover.

If u as a individual want to declare higher profit than real, noone will hold that against you… Lol…

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You can opt for presumptive taxation scheme where you can declare 6% profit on your turnover and pay tax accordingly. Here primary condition is that your turnover should be less than 2 Crore.

More about presumptive scheme…

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Hey @curiousvi

As per the Income Tax Act, when your profits are less than 6% of Turnover in Business & Profession, Tax Audit comes into the picture.

If you wish to file ITR without a tax audit, you may report your profit as 6% or more of the turnover and pay taxes accordingly.

The decision should be taken based on the cost-benefit analysis. If the Audit fees are higher than the additional tax to be paid then you can avoid the tax audit and go and pay taxes and file ITR. At the same time, CA audit fees can be claimed as an expense while filing ITR. In case you have losses, if you may opt for a tax audit and carry forward the losses.

Hope this helps! :slightly_smiling_face:

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Can you explain how fees are decided for auditing and bookkeeping.

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