Tax Audit

Basic
11800
Advanced
23600
Premium
35400

Support

unlimited

unlimited

unlimited

Includes ITR
Applicable under 44AD (Profit below prescribed rate)
For Professional Income (Turnover above 50 lakhs)
For Trading Income (Turnover above 2 Crores)

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Documents Required for Tax Audit

  • 1     Invoices of Purchases and Sales during the year
  • 2     Invoices of expenses incurred during the year
  • 3     Credit Card Statements if Expenses are incurred by Directors on behalf on Company
  • 4     Bank Statements from 1 April to 31 March for all bank accounts in the name of Company
  • 5     Copy of VAT or Service Tax returns filed (If Any)
  • 6     Copy of TDS Challans Deposited (If Any)
  • 7     Copy of TDS Returns filed (If Any)
Process Involved 20%

Step 1

Documentation

Step 2

Service Tax Returns

Step 3

VAT Returns

Step 4

Finalization of Balance Sheet

Step 5

Income Tax Return

Step 6

Tax Audit

Required documents are provided by client

Checking Service Tax Returns and reconciling with bank statements and books of Accounts

Checking VAT returns and reconciling with bank statements and books of Accounts

Balance Sheet and Profit and Loss is finalized based on data provided

Income tax return is filed based on Prepared Balance Sheet

Tax Audit is done for those where turnover exceed 50 lakhs and 2 Crores (Charges Extra)

An Assessee is liable to get his Tax Audit done by a Chartered Accountant mandatorily, if in the previous year,

1. The Person is carrying on business and his Total Sales/Turnover exceeds Rs. 2 Crore  or

2. The Person is carrying on Profession, and his Gross Receipts exceed Rs. 50 Lakhs or

3. The Person is carrying on business or profession and is covered under the provisions of section 44AD, 44ADA, 44AE, 44AF, 44BB or 44BBB and claims that his income from the said business is lower than the deemed profits and gains computed under the relevant section

The Due Date of filing the Tax Audit Report under Section 44AB is 30th Sept.

For all other assessee’s who are not liable to get their Tax Audit done under Section 44 AB – the Due Date of filing of Income Tax Return is 31st July.

CBDT  has  amended  Form  3CA, Form  3CB  &  Form  3CD and the  amended  Forms  now  require  explicit  mention  of  the observations/qualifications if any, by the auditor while issuing the true and correct audit report. With  the  introduction  of  these  changes,  the  tax  auditor’s  responsibilities  to  report  detailed  information  under  the  new/amended  clauses  has increased significantly.

In case an Assessee is liable to get his Accounts audited by an Accountant under any other Law for the same accounting period, the assessee is not mandatorily  required  to  get  his  audit  done  again  and  is  only  required  to  submit  a  report  in  the  form  mentioned  below.  However, if  the Accounting Year is different from the Accounting Year for which the Audit was done under any other Act, the Tax Audit would be required to be conducted again as per the Income Tax Act (Circular No. 561 dated 22¬05-1990 issued by CBDT)

1. Form 3CA & Form 3CD¬ These Forms are used in case where the Accounts of the business or profession of a person have already been audited under any other Law. 

2. Form 3CB & Form 3CD– These Forms are used in case where the Accounts of the business or profession have not been audited earlier.

Computation of Total Turnover for the purpose of Tax Audit ICAI has through a Guidance Note clarified the following points:¬

1. Where a person is carrying on 2 Business/2 Professions – the total turnover of both the businesses shall be clubbed together and tax audit shall be liable to be conducted if the Total Turnover exceeds Rs. 1 Crore/ Rs. 25 Lakhs as the case may be.

2. Where a person is carrying on business as well as profession and the Turnover of the business is Rs. 1.2 Crore and the Gross Receipts of the profession is Rs 22 Lakhs. In such a case, ICAI has clarified through a Guidance Note that the Assessee is liable to get the Tax Audit done of both the business as well as profession because the Gross Receipts from the business exceed the limit of Rs. 1 Crore. However, if his Total Turnover was Rs. 95 Lakhs and Gross Receipts from business was Rs. 22 Lakhs, he would not be required to get his Tax Audit done.

3. In case where a person has a total turnover of Rs. 98 Lakhs and has sold a Car for Rs. 8 Lakhs. In such a case, the total amount on adding up becomes Rs. 1.06 Lakhs i.e. above Rs. 1 Crore. Confusion arose whether the person is liable to get an audit done in this case and ICAI has clarified that the turnover will not include any amount on the sale of the fixed asset as it was held by the person for business use and not for the purpose of sale.

ICAI has further clarified that the amount received from the following items shall not be included while computing the Total Sales/Total Turnover/ Gross Receipts:¬ Sale Proceeds of Fixed Assets Sale Proceeds of Assets held as Investments Rental Income Income by way of Interest unless assessable as Business Income Any expense which is reimbursable to the Agent by the Client Penalty for Non Compliance of Section 44AB Non Compliance of the provisions of this act shall attract Penalty under section 271B of the Income Tax Act.

Penalty

If any person required to get his audit done under section 44AB fails to do so before the specified date shall be liable for penalty of ½% of the turnover/gross receipts subject to a maximum penalty of Rs. 1,50,000 However,

Section 273B states that no penalty shall be levied under section 271B if there is a reasonable cause for such failure. Some instances which have been accepted by the Tribunals/Courts as “Reasonable Cause” are:¬

1. Resignation of the Tax Auditor and Consequent Delay

2. Death or physical inability of the partner in charge of the Accounts

3. Labour Problems such as strikes, lock¬outs for a long period

4. Loss of Accounts because of Fire/Theft etc. beyond the control of the Assessee

5. Natural Calamities Revision of Tax Audit Report Tax  Audit  Report  efiled  cannot  be revised  under  normal  circumstances. 

However,  in  case  the  Accounts  are  revised  in  the  following circumstances, the Audit Report efiled can also be revised:¬

1. Revision of Accounts of a Company after its adoption in the Annual General Meeting

2. Change in Law with Retrospective effect

3. Change in Interpretation of Law (Eg: CBDT Circular, Notifications, Judgements etc.) In case the Tax Audit report efiled is revised, the Auditor shall state that it’s a Revised Report and shall also state the reasons for the same
 

LIMITATION ON CA’S FOR THE NUMBER OF TAX AUDITS

The Maximum no. of Tax Audit Assignments under Section 44AB which can be taken by a CA has been increased from 45 to 60 by the ICAI Council in its 331st meeting held from 10th to 12th Feb 2014.

Thus if a firm has 4 partners, the maximum no. of Tax Audits that can be taken by a firm in an assessment year would be 60*4=240. If the Firm undertakes all the 240 Tax Audit Assignments, the partners would not be in a position to undertake any tax audit assignment in their personal capacity.

Now that tax audit efiling is mandatory, the chartered accountant conducting the tax audit would also be required to prepare the tax audit report in electronic format.

FAQ

The report of the tax audit conducted by the chartered accountant is to be furnished in the prescribed form. The form prescribed for audit report in respect of audit conducted under section 44AB? is Form No. 3CB and the prescribed particulars are to be reported in Form No. 3CD. In case of persons covered under previous FAQ, i.e., who are required to get their accounts audited by or under any other law, the form prescribed for audit report is Form No. 3CA and the prescribed particulars are to be reported in Form No. 3CD.?.
According to section 271B, if any person who is required to comply with section 44AB fails to get his accounts audited in respect of any year or years as required under section 44AB, the Assessing Officer may impose a penalty. The penalty shall be lower of the following amounts: (a) 0.5% of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such year or years. (b) Rs. 1,50,000. However, according to section 273B?, no penalty shall be imposed if reasonable cause for such failure is proved..
Clause 12 Of Part I of Schedule I of C. A. Act allow a partner to sign on behalf of (i) Other Partner (ii) Firm b) Sign can be either digital or physical c) In my view, one partner can sign form 3CD etc. keeping in view the limit of 45 audits per partner .
Operating System – Windows XP with Service Pack 3/ Windows 7/ Windows 8. Runtime Environment – JRE 1.7 Update 6 and above, 32 Bit is required to run applets for offline forms to work. .
The software has some inherent errors as a result when we reopen draft saved xml file, it shows blank i.e. we have to re-enter the fields again. These fields are 7(B), 8(B), 9(A), 10, 11(D), 12(B), 21(Notes), 22(A), 22 AND 23..
CA has no option to print uploaded xml files. However, it can be printed from assessee’s login id, even before approval by assessee as the said xml file can be downloaded, from assessee’s login id, in the pdf format by default. .

 

The dictionary meaning of the term "audit" is check, review, inspection, etc. There are various types of audits prescribed under different laws like company law requires a company audit, cost accounting law requires a cost audit, etc. The Income-tax Law requires the taxpayer to get the audit of the accounts of his business/profession from the view point of Income-tax Law. Section 44AB gives the provisions relating to the class of taxpayers who are required to get their accounts audited from a chartered accountant. The audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. The audi.
One of the objectives of tax audit is to ascertain/derive/report the requirements of Form Nos. 3CA/3CB and 3CD. Apart from reporting requirements of Form Nos. 3CA/3CB and 3CD, a proper audit for tax purposes would ensure that the books of account and other records are properly maintained, that they faithfully reflect the income of the taxpayer and claims for deduction are correctly made by him. Such audit would also help in checking fraudulent practices. It can also facilitate the administration of tax laws by a proper presentation of accounts before the tax authorities and considerably save the time of Assessing Officers in carrying out routine verifications, like checking correctness of to.
A person covered by section 44AB should get his accounts audited and should obtain the audit report on or before the due date of filing of the return of income, i.e., on or before 30th September (*) of the relevant assessment year, e.g., Tax audit report for the financial year 2013-14 corresponding to the assessment year 2014-15 should be obtained on or before 30th September, 2014. (*) In case of a taxpayer who is required to furnish a report in Form No. 3CEB under section 92? in respect of any international transaction or specified domestic transaction, the due date of filing the return of income is 30th November of the relevant assessment year. However, due date for filing of Income tax .
B/S, P&L, Annexures, Notes, Cost Audit Report and Excise Audit and Other Report, if any, scanned in pdf format after being duly signed by Assessee and CA, whether digital or physical. Kindly note that word/excel file can also be digitally signed. .
Guidance Note on Tax Audit states that normally, it is the professional duty of the CA to ensure that the audit accepted by him is completed before the due date. Hence, yes, if delay is attributable to his part..