Section 44AB: Tax Audit

Last Updated On: Aug. 29, 2020, 8:15 p.m.
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SECTION 44AB: TAX AUDIT OF INCOME TAX ACT, 1961

A Tax audit refers to an audit which is made compulsory by the Income Tax Act. If an assessee’s gross total turnover/receipts exceed the specified limit then tax audit has to be conducted by Chartered Accountant.

 

Applicability of Tax Audit:

A tax audit is applicable based on the category of person and their threshold limit.

Business: Sales/Turnover or gross receipts exceeding Rs.1Crore.

Profession: Gross receipts exceeding Rs.50 Lakhs.

Business u/s 44AD: Sales/Turnover or Gross Receipt Exceeds Rs. 2 Crore. And any person opted for the presumptive taxation scheme and claims that the profits of the business are lower than the profits calculated. In accordance with the presumptive taxation, a scheme would be required to obtain a tax audit report.

Profession u/s 44ADA: Declaring his income at an amount less than 50% of his gross receipts and whose income exceeds the basic exemption limit for the relevant previous year.

 

DUE DATES OF FILING TAX AUDIT:

All the assessees have to file their tax audit report under section 44AB before the due date 30th September 2020. Hence, if a tax audit is applicable to the assessee, then he has to mandatorily file his/her income tax return along with the tax audit report before 30th September 2020.

If an assessee furnishes a report of a chartered accountant as referred to in section 9E relating to the international transaction or specified domestic transaction then the due date to submit audit report is 30th November.

 

Tax audit of books of accounts:

In India, the books of accounts are audited by the Chartered Accountant as prescribed in the Income Tax Act. Assessee can also file their income tax return on his behalf of CA. It is not mandatory to file an income tax return by CA. The audit report is mandatory. The audit report must be submitted before the due dates.

 

Required forms for Tax Audit:

Any person who is required to get a tax audit would be required to furnish the following for tax audit while filing an income tax return:

Form 3CA, 3CD – Audit Report Form in case where accounts of an assessee have been audited under any other law.

Form 3CB, 3CD– Audit Form in case accounts of an assessee are not being subject to audit under any other act except Income tax Act.

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