Tax Audit
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Different laws allow for different types of audits, such as company audit/statutory audit under company law provisions or cost audit. The income tax law mandates a similar audit, called “Tax Audit”. ‘Tax audit’, as the name suggests, is an examination of or review of accounts in any business or profession that taxpayers perform from an income tax perspective. This makes it easier to calculate income for the filing of return income.
FREQUENTLY ASKED QUESTIONS
Why is Tax Audit required?
- Assure proper maintenance of your books of accounts, correctness and certification by a tax auditor.
- Reporting observations/discrepancies noted by tax auditor after a methodical examination of the books of account
- Report required information, such as tax depreciation and compliance with various provisions of the income tax law, etc.
Who needs to do Tax Audit?
If the gross receipts, sales turnover, or gross receipts exceed Rs 1 million in a financial year, a taxpayer must have their tax audit done. In certain circumstances, however, taxpayers may need to have their accounts audited.
As per Finance Act 2020: A threshold limit of Rs. 1 crore for a tax audit will be raised to Rs. 5 crore starting AY 2020-21 (FY2019-20), if cash receipts of taxpayers are not less than 5% of gross receipts or turnover and if cash payments of taxpayers are not more than 5% of aggregate payments.
As per Finance Act 2021: In case, cash transactions are not exceeding 5% of total transactions, the threshold limit for cash transactions is raised to Rs 5 crores from April 2021.
What are the Penalities of non-filing or delaying of tax audit?
A penalty may be imposed on any taxpayer who fails to obtain a tax audit.
- 0.5% of total sales, turnover, or gross receipts
- Rs 1.50,000
However, no penalty will be imposed under section 271B if there’s a reasonable reason for such failure.
Process to conduct Statutory Audit
- Fill up our online application form
- Mail documents at info@indiataxhub.in
- Choose payment option from list
- Our team will reach you soon to conduct Tax Audit.