Tax Audit

Tax Audit

Tax Audit

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What is the meaning Tax Audit ?

Tax audit is an examination/review of accounts of any business /profession carried out by the taxpayer from an income tax viewpoint. A Tax audit makes the process of income computation for filing of return of income, much easier.

Who is mandatorily subject to tax audit?

Tax Audit Report Under Section 44ab of Income Tax

Following categories of taxpayers are required to get tax audit done: Category of person Threshold Carrying on business (not opting for presumptive taxation scheme*) Total sales, turnover or gross receipts exceed Rs 1 crore Carrying on business (opting presumptive taxation scheme under section 44AD ) Declares taxable income below the limits prescribed under the presumptive tax scheme and has income exceeding the basic threshold limit Carrying on profession Gross receipts exceed Rs 50 lakhs Carrying on the profession eligible for presumptive taxation under Section 44ADA Claims profits or gains lower than the prescribed limit under presumptive taxation scheme and income exceeds maximum amount not chargeable to tax Carrying on the business and is not eligible to claim presumptive taxation under Section 44AD due to opting for presumptive taxation in one tax year and not opting for presumptive tax for any of the the subsequent 5 consecutive years If income exceeds maximum amount not chargeable to tax in the subsequent 5 consecutive tax years from the tax year where presumptive taxation is not opted for

What is the due date of tax audit ?
Particulars Due Date Company 30th day of September of the assessment year Other than company whose accounts are required to be audited under this act 30th day of September of the assessment year An assesse who is required to furnish a report referred to in section 92E 30th day of November of the assessment year

What is the penalty for non-compliance?
If any taxpayer who is required to get tax audit done but fails to do so, lower of 0.5% of total sales, turnover or gross receipts or Rs 1,50,000 may be levied as penalty. However, if reasonable cause is established for non-compliance, no penalty would be imposed.

Basic
₹ 11800
  • Package Includes
  • Includes ITR
  • Applicable under 44AD (Profit below prescribed rate)
Advanced
₹ 23600
  • Package Includes
  • Includes ITR
  • For Professional Income (Turnover above 50 lakhs)
Premium
₹ 35400
  • Package Includes
  • Includes ITR
  • For Trading Income (Turnover above 2 Crores)

Documents Required for Tax Audit

  • Invoices of Purchases and Sales during the year
  • Invoices of expenses incurred during the year
  • Credit Card Statements if Expenses are incurred by Directors on behalf on Company
  • Bank Statements from 1 April to 31 March for all bank accounts in the name of Company
  • Copy of VAT or Service Tax returns filed (If Any)
  • Copy of TDS Challans Deposited (If Any)
  • Copy of TDS Returns filed (If Any)
  • Last year audited balance sheet if any
  • Copy of a bank statement of all bank that operated by the company/firm/individual
  • Sale, Purchase and Expense invoices
  • GST, TDS, Income Tax login credentials
  • GST return of all the months/quarters
  • TDS returns of all the quarters with copy of challan
  • Details of ESI, PF and all other statutory compliance that followed by the company/firm/individual (if applicable )
  • Accounting data

Process Involved

Step 1

1

Documentation

Step 1

2

Documents

Step 2

3

Service Tax Returns

Step 2

4

Verification and checking the compliance

Step 3

5

VAT Returns

Step 3

6

Discuss with the client

Step 4

7

Finalization of Balance Sheet

Step 4

8

Finalize the balance sheet and audit report

Step 5

9

Income Tax Return

Step 5

10

Fill the ITR and tax audit form 3CA/3CB and 3CD

Step 6

11

Tax Audit

Step 6

12

Verification from client income tax portal

FAQ'S
  • what is tax audit?
  • 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
  • what is the objective of tax audit?
  • 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
  • what are the forms 3CA and 3CD?
  • 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.?
  • what is the penalty for not getting the accounts audited?
  • 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.
  • What is the due date by which tax payer gets the accounts audited?
  • 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
  • lease advice in case of partnership firm can only one partner sign all the reports?
  • 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
  • What are operating system and runtime environment requirement for E-filling of Tax Audit Report?
  • 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.
  • What are the documents to be attached to Tax Audit Report?
  • 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.
  • When we reopen draft saved xml file, many fields which we had already entered is showing blank.
  • 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. How to print?
  • 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.
  • Is tax auditor responsible for delay in uploading of Tax Audit Report?
  • 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.