1. What are the mandatory conditions to get accounts audited under Income Tax Act?

• Business concern (Opting for Presumptive Taxation u/s 44AD): If the total sales, turnover or Gross receipts of the previous year relevant to the concerned assessment year exceeds the amount of Rs.2 Crore. The business concern is required to get its books of account compulsorily audited u/s 44AB if such person claims that the profits and gains from the business are lower than the profits and gains computed in accordance with the provisions oand the income exceeds the maximum amount which is not chargeable to tax (i.e basic exemption limit).

• Business concern (Opting for Presumptive Taxation u/s 44AE, 44BB, 44BBB):   The business concern is required to get its books of account compulsorily audited if such person claims that the profits and gains from the business are lower than the profits and gains computed in accordance with the provisions  and the income exceeds the maximum amount which is not changeable to tax (i.e basic exemption limit).

• Carrying Profession (Opting for Presumptive taxation): The concern is required to get its books of account compulsorily audited u/s 44AB if such person claims that the profits and gains from the business are lower than the profits and gains computed in accordance with the provisions of section 44AD (1) and the income exceeds the maximum amount Which is not changeable to tax (i.e. basic exemption limit).

2. Who is eligible to conduct Tax audit?

Chartered Accountants are eligible to conduct tax audit

3.  When a person is required to get his accounts audited under any other law (for ex Statutory audit of companies under company law provisions)

It may be noted that in such cases taxpayer need not get his accounts audited again for income tax law purpose. It is sufficient if accounts are audited under such other law before the due date of filing the return and prescribed audit report is furnished.

4. How and when tax audit report shall be furnished?

Tax auditor shall furnish tax audit report online by using his login details in the capacity of ‘chartered accountant’. Taxpayer shall also add CA details in their login portal. Once audit report is uploaded by tax auditor, same should either be accepted/rejected by taxpayer in their login portal. If rejected for any reason, all the procedures need to be followed again till the audit report is accepted by the taxpayer.

Tax audit report shall be filed on or before the due date of filing the return of income i.e., 30 November of the subsequent year in case taxpayer has entered into an international transaction and 30 September of the subsequent year in case of other taxpayers.

5.  Revision of Audit Report

In general it is not possible to conduct a revision of a tax audit report that has already been filed under this section. However, a revision can only take place if an amendment in the income tax law allows it. The audit report can then be revised by an authorized auditor, and a reason for the revision of the same must be stated.

6. Penalty on failure to get accounts audited

If any person fails to get his accounts audited as required  before the due date, then AO may impose penalty which may be a sum equal to 0.5% of the total sales, turnover or gross receipts subject to a maximum of Rs.1.5 Lakh. If the assesse gets his accounts audited and furnish the said report as required, then penalty  shall not be levied if though the return of income is filed after the due date specified. However penalty can be waived off by Commissioner of income tax with proper reasons.