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Tax Audit

Introduction

If you are a taxpayer and turnover of your business or total receipts from any profession exceeds limits as prescribed by The Income Tax Act, in any previous year then, you are obligated to get your books of accounts audited by an Independent Chartered Accountant. The Tax Audit report shall be prepared as per Section 44AB of the Income Tax Act, 1961. The due date for the submission of the Tax Audit report is 30th September of Assessment Year.

The entire procedure of the tax audit is to ensure that the Income Tax compliances & other relevant laws are appropriately being adhered.

A tax audit endeavours to verify the books of accounts of the assessee to ensure that the compliances mandated by the Income Tax Law are adequately obeyed.

Thus, following the prevailing laws and statutes, we conduct the tax audit and make the relevant disclosures in the specified formats. Our Tax Audit team is well-experienced and qualified to handle Tax Audit systematically in a time-bound manner.

Who is mandatorily subject to the Tax Audit?

Section 44AB of Income Tax Act, 1961 states that certain persons are carrying on the business or profession, have to get their books of accounts audited by a practising Chartered Accountant (CA).

Business

In case of any business, if the total amount of sales, turnover or the gross receipts exceed(s) Rs. 1 crore in any previous year.

Provided that if the aggregate of all receipts & payments in cash during the previous year does not exceed 5% of such receipts & payments. The limit of "Rs. 1 crore" will be substituted by "Rs.5 crore". The revised limits of 5 crore are applicable from Assessment Year 2021-22.

Profession

In the case of the profession, if the gross receipts in business exceed Rs. 50 lakhs in any previous year;
 
Aforesaid are imperatively and compulsorily required to get their books of accounts audited by a Chartered Accountant.
 
Apart from this, under particular circumstances, even if the turnover is less than the above-specified limits, the books of accounts have to get audited by a practising CA.

The applicable entities have to get their books of accounts audited by a CA before the date specified and furnish the report of such audit.

How Can Tax Audit Be Beneficial for Your Organization?


Apart from the fact that tax audit will save your business from legal compliances and penalties. It also has various benefits that can drive your organization upwards & serve your business in diversified ways, such as:
  • Government authorities accept audited statements as true & fair for the purpose of taxation. It will help you in getting loans and licences for your organization.
  • Adds reliability to your organization for customers, suppliers, investors, employees & tax authorities. It raises the trustworthiness of the organization.
  • It will reduce the chances of fraudulent activities in your organization.
  • We, Manish Anil Gupta & co, will give you concrete suggestions regarding improvements of business based on findings in your records.

Penalty for non-filing or delay in filing tax audit report


 The least of following may be levied as a penalty:-
  • 0.5% of the total sales, gross receipts or turnover.
  • Rs. 1,50,000.
But you don't need to bother about penalties. Because we, Manish Anil Gupta & Company are here to care for your business with the timely compliances.

Why us – Manish Anil Gupta & Co.?

  • We, here at, Manish Anil Gupta & Co. have rich & years of experience in this field and have served a diverse clientele from individual taxpayers to conglomerates; the firm's audit practises grown continuously and continues to be one of the notable areas of our specialization. We are one of the best tax audit consultants in Delhi. We ensure to take a constructive approach to our audits and have designed our audit procedure to comply with the Income Tax Act, 1961.
  • While planning, we ensure to mandate a process which side steps any surprises or uncomfortable situations by actually managing issues upfront rather than while performing the audit.
  • Our Expert & Experienced tax team will give concrete suggestions regarding the improvements of business based on their findings in the record.
  • We are committed to protect your business from any legal consequences & penalties.
  • Our Audit Methodology is based on Auditing Standards and guidance notes issued by the Institute of Chartered Accountants of India (ICAI) which are converged with International Auditing Standards.
  • We firmly believe in performing the audits efficiently, with minimum disruption, and our expertise allows us to accomplish this. We are the best audit firm in West Delhi.
  • We, focus on providing the crucial insights that you and your respective stakeholders can use for accurate and resourceful reporting.
  • Our audit approach is pragmatic and logical, relying on a risk-based audit methodology, built on comprehensive planning and client input, and is amply supported by the latest technology and tools. Our audit team delivers credibility to your financial statements and reports, assures the director, and insights to your leadership to enhance systems while managing risk.
If you are looking for an experienced tax audit firm in Delhi, Manish Anil Gupta & Co. can meet your expectations. We are situated in West Delhi; if you are seeking for Income Tax Audit in Delhi, you can reach out to us at info@manishanilgupta.com

Rahul Garg

Director-Taxation & Compliances

“Don’t Be Intimidated By What You Don’t Know. That Can Be Your Greatest Strength And Ensure That You Do Things Differently From Everyone Else.” .

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Frequently Asked Questions


If a person who is supposed to get the Tax Audit carried out fails to get his accounts audited u/s 44AB, he will have to pay a penalty of an amount lower of the following two amounts –
  • 0.5% of the sales, total turnover or gross receipts during the relevant previous year
  • Rs.1,50,000.
No, it is not necessary that tax audit applicable for one year will be applicable for all the subsequent years also. The applicability of tax audit is ascertained with reference to each previous year.
 
* Form 3CA: It is furnished when a person carrying on business or profession is already liable to get his accounts audited under any other law. For example, companies required to get the audit carried out under the Companies Act, 2013.

* Form 3CB: It is filed when a person carrying on business or profession is not liable to get his accounts audited under any other law.

* Form 3CD: It is a statement of particulars in which the auditor has to report on the various matters contained therein. Form 3CD is divided into Part A and Part B. Part A covers the basic factual details about the assessee such as his name, address, PAN, assessment year and previous year, etc. Part B contains the particulars of various compliances under the Income Tax Act.This statement has to be furnished along with either of the audit reports mentioned above.
 
No, the persons engaged in a profession are not entitled to avail an extended turnover limit of Rs. 10 crores for tax audit in the case of digital transactions. This benefit is available only to the assessees carrying on a business.
 
The due for filing the Tax Audit report is 30th September following the relevant financial year. For example, the Tax Audit report for the Financial Year 2022-23 should be filed on or before 30th September 2023.
 

As per Section 44AB of the Income Tax Act, individuals and businesses with turnover or gross receipts exceeding certain limits are required to get a tax audit.

Tax audit is applicable for individuals who are carrying on business or profession and meet the turnover or gross receipts criteria specified by the Income Tax Act.

A tax audit is a process conducted by a Chartered Accountant to verify the books of accounts and financial statements of a taxpayer to ensure compliance with the provisions of the Income Tax Act and share the tax audit report. It aims to ensure that the taxpayer has accurately reported their income, deductions, and other financial details as required by law.
Taxpayers who meet certain turnover or receipt thresholds as prescribed by the Income Tax Act are required to undergo a tax audit. For businesses, the turnover limit is generally INR 1 crore in a financial year. For professionals, the gross receipts limit is typically INR 50 lakhs in a financial year. However, these limits are subject to change, and it's important to refer to the latest provisions of the Income Tax Act.
The primary purpose of a tax audit is to ensure that taxpayers comply with the provisions of the Income Tax Act and maintain proper books of accounts. It helps in detecting and preventing tax evasion, ensuring accuracy in reporting financial information, and promoting transparency in tax matters.
For businesses, if the total sales, turnover, or gross receipts exceed Rs. 1 crore in any previous year, a tax audit is mandatory. However, from Assessment Year 2022-23 onwards, if the aggregate of all receipts and payments in cash during the previous year does not exceed 5% of such receipts and payments, the turnover limit for a tax audit is increased to Rs. 10 crore.
Yes, under specific circumstances, even if the turnover or gross receipts are lower than the prescribed limits, entities may still be required to undergo a tax audit. These circumstances include situations where the taxpayer has opted for presumptive taxation under Section 44AD, Section 44ADA, or Section 44AE and wishes to declare lower profits or income than the prescribed limits.
Yes, the tax audit report can be revised but only with specific conditions as mentioned under the law. It is important to ensure accuracy and completeness before finalizing and submitting the report to avoid any discrepancies or non-compliance.
The tax audit process involves the examination of books of accounts, financial statements, supporting documents, and other relevant records of the taxpayer. The Chartered Accountant verifies the accuracy of the reported income, deductions, and compliance with applicable tax laws. They also ensure adherence to accounting standards and disclose any discrepancies or non-compliance in the tax audit report.
Tax audit provisions primarily apply to businesses and professionals. However, individuals may also be subject to tax audit if their turnover or gross receipts exceed the prescribed thresholds as per the Income Tax Act.

 

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