Have you ever heard about the term audit or tax audit? Who does this work tax audits? Take a deep breath we will answer all your questions one by one. It basically involves the verification of the accounts maintained by the assessee. Auditors validate the Income the tax computation and compliance with the laws of income tax. A certified chartered accountant carries out the auditing of accounts.
Further, we will discuss the tax audit limit, audit due date etc.
What do you understand by tax audit limit?
There are certain tax audit procedures and tax audit limit, whose provisions are mentioned under the section 44AD of the Income Tax. Let’s take a look at what are the limits and basically who all have to undergo Tax Audits.
In accordance with the Section 44AB, a tax audit is required by the business entities, working professionals, and person who are already enrolled under the Presumptive Taxation Scheme.
In the case of Business
If you operate a business in India, and your total turnover sales or gross receipts are more than Rs. 1 crore in any of the previous year, then there would be a requirement of Tax Audit.
In accordance with section 2(3), business is defined as any trade, commerce, manufacturing activity or any adventure or concern in the nature of trade, commerce, and manufacture.
In the case of a Profession
If you are a working professional and your gross receipts in that profession are more than Rs. 50 lakhs in any of the previous year, then there would be a tax audit.
If you are wondering, what all professions are involved in this, there is a list mentioned below-
1. Engineer
2. Legal Professionals-Advocate or lawyer
3. Technical consultant
4. Accountant
5. Technical Consultant
6. Medical Professionals-Doctor, Physiotherapist etc
7. Architect
8. Authorized Representative
9. Interior Decorator
In the case of the Presumptive Taxation Scheme
There is a presumptive taxation scheme available under section 44AD, if you are enrolled under this scheme or the annual turnover or sales exceeds Rs. 2 crore then there would be a requirement of a tax audit.
You have to obtain the tax audit report if you are already enrolled under the presumptive taxation scheme (Even if the profits made by you, are lower than the mentioned amount under the presumptive taxation scheme).
Hope you have an idea by now, regarding who has to obtain the tax audit reports and what are their limits.
Have you taken a note of next due date of tax audit reports?
The tax audit due date for 2019 has not been announced yet by the Income-tax department. But still, just to give an idea; for the year of 2018, the tax audit due date was 30th September.
Keep yourself audit ready beforehand.
For more information, please contact Enterslice.