Different Audit applicable to individuals, Companies and HUF. There are many tax compliances in India. Here I simplify the different audit applicable to entity and to whom.

Tax audit:

A tax payer having a turnover or gross receipts more than 1 Crore is liable for tax audit for that financial years.

Please note that with effect from FY 2020-21,

The threshold limit for audit has increased from 1 crore to 5 crores, but there is a condition.

Income Tax audit / GST Audit / LLP Audit Criteria

The condition is your total cash payments should be restricted to 5% of the total cash payments and total cash receipts should be limited to 5% of the gross turnover.

Category Threshold
Individual (not covered under presumptive taxation) 1 Crore
Private limited company, Limited company 1 Crore
HUF (not covered under presumptive taxation) 1 Crore
Professional person like CA, Doctors, advocates, interior designers etc 50 Lacs
If you opted for presumptive taxation Turnover is upto 2 crores, but profit declared is below 6% or 8%, then tax audit is applicable.
Carrying on business (opting 44AD) and having business loss but income is below threshold limit Tax audit is not applicable

Report to furnished in Tax Audit

Form 3CA: When a person carrying on business or profession is required to get his accounts audited under any other law.

For Eg: If you are a Company, then you have to get your accounts audited even under Companies Act as per the details mentioned below. So here Form 3CA is applicable.

Form 3CB: When a person carrying on business or profession is not required to get his accounts audited under any other law.

For eg: An individual is not covered under Companies act. In that case, form 3CB is applicable.

Other Audits applicable to Companies:

For companies, by default Statutory Audit is applicable. This is the audit applicable as per Companies Act, 2013. So ensure that even if your Turnover is Nil, you have to furnish audit report as per the Schedule III of Companies Act long with Auditors report, notes to accounts and directors report.

Other Audits applicable to LLP

Tax audit limit LLP is mentioned above. However, LLP Audit is also applicable as per the turnover criteria

If the contribution given by partners in LLP exceeds Rs. 25 lacs or the turnover exceeds 40 Lacs during the Financial year, then LLP Audit is applicable as per LLP Act, 2008.

GST Audit

GST Audit is applicable to any entity with a turnover of 5 crore or more. Be it proprietorship, partnership, HUF, LLP and Companies.

Penalty:

For tax audit

0.5% of turnover or gross receipts or 150000/- whichever is less. This is not a mandatory penalty, if the assessing officer is satisfied with the reason given for late furnishing of report, the penalty can be waived.

Author Bio

Qualification: CA in Practice
Company: Makwana Sweta & Associates
Location: Mumbai, Maharashtra, IN
Member Since: 20 Aug 2017 | Total Posts: 62
A qualified Chartered Accountant with over 4 years of rich experience in Company Law, Audits, Accounts & taxation. She is a writer at her own blog https://insights.caswetamakwana.com/. She is keen in streamlining business accounts of the Company and provide Startup consultancy. View Full Profile

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