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Audit under Income Tax Act

Why is Tax Audit Required?

The objective of Tax Audit is to ensure that the books of accounts of the company have been maintained in accordance with the provisions of the Income Tax Act. A proper audit for tax purposes would ensure that proper records are being maintained by the company and that the accounts properly reflect the income reported by the company in its tax returns. This audit effectively curbs tax evasion and ensures tax compliance.

Who needs to get a Tax Audit done?

Audit under section 44AB is applicable to four categories of assesses

  • The first category covers any person carrying on a business whose total sales, turnover or gross receipts exceed Rs. 60 Lakhs during the previous year.
  • The second category covers any person who is carrying on a profession whose gross receipts exceed Rs.15 Lakhs.
  • The third category covers persons whose income is assessed on a presumptive basis under section 44AE, 44BB or 44BBB. Where such assesses declare an income lower than that presumed under the Sections 44AE, 44BB or 44BBB, they are required get their accounts audited in accordance with Section 44AB.
  • The Fourth Category covers those persons who declare a lower income than the amount presumed under section 44AD. The difference between the fourth and the third category is that, in the case of the fourth category, assesses are subject to audit under section 44AB only if their income exceeds the basic exemption limit.

Any person who is covered by the above four categories is required to get his accounts audited by a Chartered Accountant before 30th September of each year.

Apart from the Tax audit under Section 44AB, there are audit and certification requirement for various assesses under various provisions of Income Tax Act. All such audit and certification under Income Tax is done by a Chartered Accountant.

What we can do for you?

We are qualified to be appointed as auditors under the Income Tax Act. We possess the requisite knowledge and skill to conduct audit of a company to given an unbiased and independent opinion based on an objective assessment of facts.

 

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