What Does Turnover Mean?

A turnover is an amount that is important for the tax audit. A Tax audit is an account of the audits that is used to manage all the needs and requirements of the Income Tax Act. In simple words, a turnover is known as the total revenue which a business or company makes through the given or specific time period through its standard business activities. It is the speed of the company and business, which replaces the assets within a specific period of time. It includes selling your products, inventory, collecting and receiving, and replacing employees. It shows you the percentage of the investment portfolio of your business or company. 

In the Income tax return, turnover is known as the total sales made by any business or individual assessee after deduction of the following: 

• The number of goods returned by the customer. 
• Price adjustment after carrying out the completion of the transaction. 
• Cancelled bills on the termination of the account 
• Trade discounts 

Calculation of the Turnover

• The turnover calculation should the based on the rules of accountancy. 

• Any pending royalty payments or the irrecoverable debts deductions should not be made that are in dispute. 
• Packing, interest, and commission are not included in the turnover transaction 
• The calculation of the turnover includes only the business connected with the assessee and the capital receipts.
• The turnover should not include the GST and the duty excise. 
• The accounting system of the turnover is maintained by the company, and all other additional charges need to be separated from the actual turnover. 

Turnover of the Sale through an Agent 

Here are some of the points given below for the turnover for sale through an agent: 

• The assessee can make a sale through the commission agent, but in such cases, the transfer of risk and reward so the owner's criteria. 
• The risk and reward related to the ownership are transferred to the commission agent or consignee. 
• The purchase records books can ab more than the actual limits in such conditions, the assessee should meet the turnover criteria, and the tax audit is important for these cases.