Tax Audit
₹ 24999 /-
Tax Audit
The Government of India carries out a variety of audits in accordance with various laws, including cost audits, stock audits, and statutory audits conducted in accordance with rules of company law. Similar to that, Income Tax law has made "Tax Audit" mandatory. Accounting records from any industry are examined during a tax audit, which simplifies the process of calculating income for tax returns.
It is carried out by a chartered accountant as specified in Section 44AB of the Income Tax Act of 1961. Simply put, a tax audit is an examination of tax related issues.
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Type of Accounts Come Under Tax Audit
Some Accountants are come under this tax audit,there are
Individual/Proprietorship
Undivided Hindu Family
Corporation
Partnership Business
Organization of People
Local Authority
Section 44AD Presumptive Taxation Scheme
Section 44ADA Presumptive Taxation Scheme
Process of Tax Audit
Objectives of Tax Audit
First Type
It is considered the most basic of all sorts of tax audits. During this audit, the IRS will send you a letter and ask you for information on a specific area of your tax return.
Second Type
In this type of audit, the auditor will ask numerous comprehensive questions and will most likely spend your entire day; but, if the IRS requires it, they will give you more time to collect and submit essential facts.
Third Type
In this form of audit, the IRS pays a visit to the taxpayer's home or place of business. They may request that the taxpayer examine other things as well; they will not be confined to specific items.
What is included in Tax Audit Turnover?
What is not covered by Turnover for Tax Audit?
Other Requirements of Annual Compliance
The tax auditor submits his report in the appropriate form, which could be Form 3CA or Form 3CB, in which:
Penalty for non-filing or late filing of a tax audit report
If a taxpayer fails to get their tax audit completed, they will face the following penalties:
When and how should a tax audit report be provided?
Using his login credentials, the tax auditor files his tax audit report online. It is critical for taxpayers to enter their CA's information into their login page. Once the auditor has uploaded the audit report, the taxpayer must either approve or reject it.
The deadline for a taxpayer to have his finances audited
Any person/persons covered by section 44AB must have their accounts audited and receive the audit reports on or by September 30th of that year, i.e. the due date for filing the income tax return.
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Frequently Asked Questions
Businesses have a tax audit limit of Rs. 1 crore.
The professional tax audit ceiling is Rs. 50 lakhs.
The maximum number of tax audits that a Chartered Accountant (CA) can do is 60. In the case of a corporation, the tax audit limit applies to all partners.
The primary goal of a Tax Audit is to guarantee that the books of Accounts are maintained in accordance with the rules of the Income Tax Act. Tax audit also ensures that the accounts are presented correctly to the Assessing Officers.
The following are the reasons for a tax audit:
Earning more than the average
Taking disproportionate deductions in relation to income
Every year, business losses are claimed.
Making insignificant deductions
If there is an error in the books of accounts, the CA will usually repair it. If an error is made, a penalty will be assessed, which may result in the payment of additional tax.
False tax returns and smuggling are two instances of tax evasion, as are phoney documents and bribery.
If you do not have a receipt, the auditor may accept any other paperwork, but if you do not submit it, the auditor will not accept the entry in the books of accounts.
