Article
How many Tax Returns are audited?
Thousands of companies get their accounts audited every year and after getting their accounts audited, they e-file their Tax Audit Report. Here are the basic details about tax audit.
What is Tax Audit?
Tax Audit is nothing but the verification of the books of accounts of the assessee, that is conducted to validate the Income Tax Computation and Compliances with the Income Tax Laws. Tax Audits are carried out by Chartered Accounts in India.
Who is required to get their accounts audited?
Not every business and/or profession is required to get their books of accounts audited. There is a tax audit that has been defined by law under which a business and/or professional is audited.
- A Professional – income more than Rs. 50 lakhs p.a.
- Business Person – income more than Rs. 1 crore p.a.
- Individuals that fall under Section 44AD (Presumptive Scheme for Businesspersons – if the net income is less than or equal to 8% of the gross turnover; net income considered at 6% in case of digital receipts); Section 44ADA (Presumptive Scheme for Professionals – if net income is less than or equal to 50% of the gross receipts); Section 44AE (Transporters); Section 44AF (Retail Business); Section 44BB (Exploration of Mineral Oils); Section 44BBB (Foreign Companies involved in the business of civil construction)
If any taxpayer, be it a professional or business, fails to get their accounts audited, then they will be charged with a minimum penalty of 0.5% of total sales turnover/ gross receipts or fine of Rs. 1.5 lakhs, whichever is less. However, if a reasonable cause is stated for non-compliance, no penalty will be imposed.
What is the due date to file Tax Audit Report?
The due date for completing and filing tax audit report under section 44AB of Income Tax Act is 30th September of the assessment year. Hence, if a taxpayer is required to obtain tax audit, then he or she would be required to file income tax return on or before 30th September along with the tax audit report. In case the taxpayer is also liable for transfer pricing audit, then the due date for filing tax audit is 30th November of the assessment year.
