Applicability of CARO, 2020: (For F.Y 2020-21 and F.Y. 2021-22)
The CARO applies to all the companies except the following companies:-
♦ One person Company
♦ Small Companies*
♦ Banking Companies
♦ Companies registered for charitable purposes
♦ Insurance companies
♦ The following private companies having :
> Gross receipts or revenue < 10 Cr. in a F.Y and
> Paid up share capital plus reserves < 1 Cr. As on Balance Date and
> Whose borrowings is < Rs 1 Cr. at any time during the F.Y.
Applicability of Cash Flow:
Preparation of Cash Flow Statement is compulsory for all companies except the following: –
- One Person Company
- Dormant Company
- Small Company*
Applicability of Internal Financial Controls (IFC): (For F.Y 2020-21 and F.Y. 2021-22)
IFC is applicable to all companies except the following: –
- One Person Company
- Small Company*
- Private Company having
> Turnover : < 50 Cr and
> Aggregate borrowings from banks or financial institutions or any body corporate at any point of time during the financial year : < Rs. 25 Cr.
*Definition of Small Company:
| Particulars | For 2020-21 | For 2021-22 and onwards |
| Paid up share capital as on reporting date; and | Does not exceed 50 lakhs | Does not exceed 2 Crores |
| Turnover for immediately preceding financial year. | Does not exceed 2 crores | Does not exceed 20 Crores |
The following company shall not qualify as a small company:
a) A holding company or a subsidiary company.
b) A company registered under Section 8 of the Act.
c) A company or body corporate governed by any special act.
Applicability of Corporate Social Responsibility:
CSR is applicable to all companies having:
- Net Worth > 500 Cr or
- Turnover > 1000 Cr or
- Net Profit > 5 Cr
Applicability of Ind AS:
- Listed Companies or is in the process of being listed
- Unlisted Companies (Inc NBFC) having Net worth is > INR 250 crore
Applicability of GSTR 9: For registered person whose aggregate turnover is > Rs. 2 Cr.
|
Turnover limit for the previous year |
Amount of profit |
Whether cash receipts less than % of else Turnover |
Whether cash payment less than 5% of the total payment |
Is Tax audit Applicable? |
| Mere than 10 Crores | Not applicable | Not applicable | Not applicable | Yes |
| More than 2 crore but upto 10Crore | Not applicable | Yes | Yes | No |
| More than 2 crore but upto 10Crore | Not applicable | No | No | Yes |
| Mere than 1 crore but upto 2 Crore |
More than 8% or 6% of Turnover |
Not applicable |
Not applicable |
Yes |
| More than 1 crore but upto 2 Crore |
Less than 8% or 6% of Turnover
|
Not applicable
|
Not applicable
|
No
|
| Less than 1 crore | More than 8% or 6 % of Turnover | Not applicable
|
Not applicable
|
Yes
|
| Less than 1 crore | more than Turnover Less than 8% or 6% | Not applicable | Not applicable | No |
In case of person engaged in profession and opting for presumptive taxation under section 44ADA:
| Turnover limit for the previous year | Amount of profit with respect to turnover (in %) | Is audit Applicable? |
| More than 50 Lakhs | Not applicable | Yes 44AB(b) |
| Upto 50 Lakhs | More than 50% | No |
| Upto 50 Lakhs | Less than 50% (sec 44ADA) | Yes 44AB(d) |
Author Bio
44AB cases only 1st one seems to be correct.
We need to revisit TAX AUDIT Applicability
Sure Mr Kanhaiya…
Could you please help me out… where is the confusion??