In our case one of our client died in Dec. 05 and having a propritorship firm in his name. Total sales for the year is Rs.45 lacs. aftr his death his firm is transfered to his son. Now pls let me know whether for the FY 2005-06 this firm is liable for tax Audit or Not. If any relivent case U know pls tell me. Regards
Atul PAliwal
2006-10-06 23:06:57 · 2 answers · asked by atul p 1 in Business & Finance ➔ Taxes ➔ India
Yes. If the sales of the firm is more than 40 lakhs till the date of death of the said person, then it is liable for tax audit.
The sales of the firm from the next day of his death will be treated as new firm for the purpose of Income Tax.
2006-10-07 01:36:08 · answer #1 · answered by Anonymous · 5⤊ 0⤋
For sure the firm is liable for tax audit if the sales exceed Rs.40 lacs fo the year.
But remember it is a case of Discontinued operations, so apply relevant sections of the Income Tax Act.
2006-10-11 05:11:00 · answer #2 · answered by apurav a 3 · 0⤊ 0⤋