Tax Audits

Tax Audits price starting at INR Rs. 6999/- only.

Rs. 6999/- only
About Tax Audits Mandatory Threshold Business Category Objective

What is Tax Audits ?

Let's first define the term "audit" before learning what a tax audit entails. The definition of "audit" in the dictionary says that it is an official examination of an organization's financial records and the generation of a report, usually by an independent entity. It is often referred to as a thorough analysis or evaluation of anything. There are numerous audit types that are carried out in accordance with various laws, including cost audits, stock audits, and statutory audits carried out in accordance with company law regulations. In a similar vein, income tax legislation also requires an audit known as a "Tax Audit." Tax audits are, as the name implies, an inspection or review of the financial records of any business or profession operated by taxpayers from the perspective of their income taxes. Making the process of calculating income for filing of return of income easier.

Who is mandatorily subject to tax audit?

Following categories of taxpayers are required to get tax audit done: 

Business

Operating a business (and without selecting a presumed taxation scheme).

Business  

Carrying on a business that falls under Sections 44AE, 44BB, or 44BBB and is therefore presumed to be taxable. 

Business

Carrying on an activity that is taxable presumed to do so under Section 44AD.

Business

Carrying on a company and declaring income in accordance with the Section 44AD presumptive taxation system.

Threshold

Tax Audits Threshold

  • The fiscal year's total sales, revenue, or gross collections reach Rs 1 crore.
  • Claims profits or gains that are below the limit specified under the presumptive taxation regime.
  • Declares taxable income below the presumptive tax scheme's restrictions but having income over the basic threshold limit.
  • Businesses will not be subject to a tax audit if their annual gross receipts, sales, or turnover do not exceed Rs 2 crore.
Business Category

Business Category of Tax Audits

Profession

  • Carrying on profession. Carrying on the profession eligible for presumptive taxation under Section 44ADA.

Business loss

  • Businesses will not be subject to a tax audit if their annual gross receipts, sales, or turnover do not exceed Rs 2 crore.

How and when tax audit report shall be furnished?

  • The tax auditor is required to submit the tax audit report online using his login information as a "Chartered Accountant." The taxpayer must include CA information in their login site as well. Once the tax auditor has uploaded the audit report, the taxpayer should login and accept or reject the document. If the audit report is denied for any reason, all the steps must be repeated until the taxpayer accepts it. The tax audit report must be submitted on or before the deadline for filing the income tax return. If the taxpayer has engaged in an overseas transaction, it is 30 November of the next year; for all other taxpayers, it is 30 September of the following year.
Objectives of tax audit

Tax audit is  conducted to achieve the following objectives

  • Make sure the books of accounts are kept up to date, accurate, and certified by a tax auditor.
  • Following a thorough review of the books of accounts, the tax auditor's reporting observations and discrepancies are noted.
  • Must submit the required information, such as tax depreciation, compliance with different income tax law restrictions, etc.
  • All of these things make it possible for tax authorities to check the accuracy of income tax returns submitted by taxpayers. It also becomes simpler to calculate and verify total income, claim deductions, etc.

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