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Tax Audit u/s 44AB of Income-tax Act, 1961: Audit of accounts of certain persons carrying on business or profession
Tax Audit is compulsory in the following cases:
- In case a person carries business
Where a person carries business is required to get his accounts audited by a Chartered accountant if his total sales/turnover/gross receipt exceeds Rs.1Crore in the previous year, before 30th September of the relevant assessment year. However, this section shall not be applicable to the person who declares profit U/S 44AD and has total sales/turnover/gross receipts less than Rs.2Crore.
- In case a person carries profession
Where a person carries a profession is required to get his accounts audited if the gross receipts in the previous year exceed Rs.50 lacks. Also, where a person carries profession, declares profit U/S 44ADA, and declares the profit less than the deemed profit and his total income exceeds the limit which is not chargeable to tax, then he requires to get his accounts audited.
However, this section shall not be applicable to the person who declares profit U/S 44AD and has total sales/turnover/gross receipts less than Rs.2Crore.
If failed to get accounts audited as required by sec 44AB –Penalty – Lower of
- 1) 0.5% of total sales, turnover or gross receipts of business or profession
- 2) Rs.150000
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