A person is required to get their accounts audited from a Chartered Accountant under Income tax law if it falls in SPECIFIED CATEGORY stated under Section 44AB.
TAX AUDIT FORMS
Audit Report: Form 3CA- Taxpayer whose accounts are required to be audited under any law in force eg. Companies
Audit Report: Form 3CB- Taxpayer whose accounts are not required to be audited under any law in force eg. Individual
Form 3CD-Detailed statement comprising of 44 clauses
PENALTY ON FAILURE
The penalty of Not getting a Tax Audit done: Lower of two
• 0.5% of the total sales, turnover or gross receipts
• Rs. 1,50,000
WHO IS REQUIRED TO GET A TAX AUDIT DONE?
1) A person carrying on business, if his total sales, turnover or gross receipts exceeds 1 Crore
Note: Threshold Limit is increased from Rs. 1 Crore to Rs. 10 crores if cash receipt and payment made during the year does not exceed 5% of total receipt or payment.
2) A person carrying on Profession, if his gross receipts in profession exceed 50 Lakhs
Note common for 1 and 2: This provision does not apply to the person, who opts for a presumptive taxation scheme under section 44AD and his total sales or turnover does not exceed Rs. 2 crores
3) Taking benefit of presumptive taxation under Section 44AD then required only if Declares taxable income below the limits prescribed under the presumptive tax scheme and has income exceeding the basic threshold limit.
4) Taking benefit of presumptive taxation under Section 44AE/44BB/44BBB then required only if Claims profits or gains are lower than the prescribed limit under presumptive taxation scheme
I WILL DISCUSS SOME IMPORTANT CLAUSES OF FORM 3CD IN THE UPCOMING ARTICLES
Author Bio
Where turnover of assessee is less than 10 crores and cash receipts / payments are also less than 5% of gross turnover / purchases. Can a CA carry out tax audit and submit form 3CB CD. In such case the due date for filing of return of income will be 31st October ?