TAX Audit
Assurance over information in Financial Statements help to navigate complexity & brings transparent information to investors & stakeholders.
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Lex Koterie LLP is a leader in assurance, tax, transaction & advisory. Our tax practice is a long- established one with specialists across all regulations & experience with Income Tax Preparation, assessment, scrutiny & dispute cases. The professional leaders provide detailed evaluations covering tax audit workflow.
There are various laws in India that govern different kinds of audit like income tax audit, stock audit, cost audit, company or statutory audit as per company law, to name a few. Section 44AB of the Income Tax Act, 1961, lays down the provisions for income tax audit.
Provision related to Tax Audit
When the annual gross turnover or professional receipt of an assessee exceeds the limit as specified in the Income Tax Act 1961, the Income tax act makes it compulsory to conduct an audit under section 44AB of Income Tax Act, 1961. In common parlance, such audit is referred as “Tax audit” Income Tax Act 1961 specified requirement of audit under different sections such as:
- Audit under Section 12A (b) of Income Tax Act, 1961 in case of charitable or religious trust of institutions.
- Tax audit under section 44 AB in the case of a person referred to in clause (b) of sub-rule (1) of rule 6G.
- Various other audit requirements are given under different sections such as Section 33AB, 35D, 33ABA, 32AB etc. for special deductions and tax holidays.
We also advise clients on how to effectively navigate the myriad of tax, and regulatory issues in cross- border transactions to help manage compliance risks and potentially enhance returns.
Our goal is to minimize your business and personal tax exposure by means of legitimate planning and keeping you aware of the changing requirements of the taxation system in India and abroad.
- An analysis of the accuracy of income tax returns filed in an assessment year. by individuals and companies, and maintenance of records by the Chartered Accountant.
- Reporting of findings by the tax auditor after a detailed analysis of accuracies/inaccuracies in tax returns filed.
- Reporting essential details regarding compliance, tax depreciation, etc., as per the laws of income tax. This streamlines the processes for the income tax authorities in calculation and assessing the accuracy of the income tax return filed by the individual or company.
- Checks frauds and malpractices in filing income tax returns.
Tax Audit reports can be presented in two different ways by tax auditors, differing on the basis of the laws under which the accounts have been audited.
- Form 3CB and Form 3CD: For tax audit reports presented under Section 44AB of the Income Tax Act, 1961, Form 3CB and the prescribed details have to be reported in the Form 3CD.
- Form 3CA and Form 3CD: When a taxpayer prefers to get the accounts audited under any law other than Section 44AB, then the relevant form is Form 3CA, while the prescribed details have to be reported in the Form 3CD.
- Businesses, whose annual gross turnover/receipt does not exceeds the limit as prescribed by the department are eligible for this scheme.
- No need to maintain books of Accounts.
- Net income is estimated to be @ 8% of your gross receipt/turnover if received through cash and @6% if gross receipts are received through digital mode of payments.
- If Assesse opt for Presumptive taxation u/s 44AD, then he should be follow same section of audit for next 5 financial years.
- The return of income needs to be filed in ITR 4 Form to avail this scheme.
- Professions, whose annual gross receipt does not exceeds the limit as prescribed by the department are eligible for this scheme.
- No need to maintain books of Accounts.
- Net income is estimated to be @ 50% of gross receipts.
- If assessee opt for Presumptive taxation u/s 44ADA, then he should be follow same section of audit for next 5 financial years.
- If assessee claimed profit less than 50%, he will be required to get his accounts audited u/s 44AB of Income Tax Act, 1961.
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