Tax audit is an activity during which a tax agency or an auditor goes through or reviews the entire data of accounts of a business to ascertain the tax compliance. It's mandatory for all companies to make sure that they need conducted regular audits legally under Section 44AB of the tax Act, 1961 and conducting periodic tax audits is additionally mandatory as per law. consistent with the IT Act, Section 44AB lists all relevant provisions and requirements to hold out an tax audit legally. the most goal of performing tax audit periodically is to make sure that the small print and data associated with the income, expenditure and tax-deductible expenditure details are organized and filed properly by the business.
According to Section 44AB of the tax Act, there are certain groups of tax assesses to whom performing an tax audit is mandatory. Below mentioned are the groups:
A self-employed individual who is annual turnover is quite Rs. 1 crore
A self-employed professional whose annual income exceeds quite Rs. 50 lakhs
An individual who is eligible for the presumptive taxation scheme as per Section 44AD but claiming that their annual accounted profits are less than the entire amount of tax paid.
A freelance whose calculated income for the fiscal year is quite the quantity that's not responsible for taxation or tax-exempt.
If a private , with the eligibility for taxation under the presumptive taxation scheme opts out of it after a particular period of your time . Once getting out of the presumptive taxation scheme, the person isn't allowed to urge into the scheme (presumptive taxation scheme) for endless period of 5 assessment years
A person who meet the wants for the presumptive taxation scheme under Section 44AE but claiming that the calculated profits are less than those within the presumptive taxation scheme
A person who meet the wants for the presumptive taxation scheme under Section 44BBB but claiming that the calculated profits are but those accounted with the presumptive taxation scheme
Tax Audit Limit for Business and Profession
There will be many questions arising altogether taxpayer’s minds about the tax audit, like should i want to try to to tax audit? what's the particular tax audit limit? Who is mandatorily subjected to a tax audit? Don’t worry, here you'll check the entire information on the Tax audit limit for business and profession.
Individuals who are non-residents deriving income through shipping business or operation of aircraft covered u/s 44AB or 44BBA, aren't needed to perform their accounts auditing. Individuals who are engaged in certain business like Truck operators, declaring their income but the quantity calculated under section 44AE, 44BB or 44BBB, just in case could also be should get their accounts audited.
Due Dates of Filing the report of Tax Audit
Generally, 30th September is that the notified last date to file a tax audit report under section 44AB for all the individuals. The individuals who aren't eligible to file the tax audit, should file their tax return and 31st July is that the noted last date for that. If a private who is required to supply the report of a accountant concerning specified domestic transaction or any international transactions mentioned in section 9E then the notified last date to submit the tax audit report is 30th November.
Who will Audit Your Account Books?
In our country, usually, an accounts professional or a accountant will audit the account and examine and organize the entire account report as per the tax Act. they're the qualified professionals for accounts and hold the degree of Chartered Accountancy (CA) from ICAI. They work for a fee as prescribed by ICAI. a private also can get service from a professional accountant to file their tax return on his behalf or they will file their tax return by himself. It's mandatory to file a tax audit in India reported by CA; but within the case of filing tax return, it's not mandatory. Importantly, the tax audit report must be submitted before the notified last dates to avoid penalties.
Failure to urge Audit Report
Getting an account audit is mandatory and compulsory for all specified assesses if they fail within the above conditions specified. As per tax act the assess are going to be eligible to levy penalty on failure to urge account audit on or before the notified last date, that's Rs.1,50,000 or half percent of gross receipt or turnover, whichever is a smaller amount .