Ensure Compliance. Optimize Financial Integrity.
Understanding Income Tax Audits
What is an Income‑Tax Audit?
An income-tax audit involves a thorough examination of an individual’s or organization’s financial records to verify accuracy and adherence to the Income Tax Act, 1961. This process ensures that the income, deductions, and tax liabilities are reported correctly, maintaining transparency and compliance.
What is an Income‑Tax Audit?
Ensures adherence to tax laws, avoiding legal penalties.
Financial Accuracy
Validates the correctness of financial statements, promoting trust among stakeholders.
Risk Mitigation
Identifies discrepancies that could lead to future tax liabilities or legal issues.
Our IT Tax Filing Services
✔ Comprehensive Audit Assessments
We conduct detailed evaluations of your financial records to ensure compliance with the Income Tax Act and other relevant regulations.
✔ Tax Audit Reports (Form 3CA/3CB & 3CD)
Preparation and filing of mandatory tax audit reports as per Section 44AB requirements.
✔ Advisory on Tax Compliance
Guidance on maintaining proper books of accounts and implementing effective internal controls.
✔ Representation Before Tax Authorities
Assistance in representing your case during tax assessments or inquiries.
Who Requires an Income Tax Audit?
Businesses
Entities with total sales or turnover exceeding ₹1 crore in the previous financial year.
Professionals
Individuals with gross receipts exceeding ₹50 lakh.
Presumptive Taxation Opt-Outs
Taxpayers under Sections 44AD/44ADA declaring profits below prescribed limits and with income exceeding the basic exemption limit.
Our Audit Process
Document Collection
Gather financial statements, bank records, and relevant documents.
Preliminary Review
Assess records to identify areas requiring detailed examination.
Detailed Analysis
Examine transactions, verify compliance, and detect discrepancies.
Report Preparation
Compile findings into Form 3CA/3CB and 3CD as applicable.
Client Discussion
Review findings with you and suggest corrective actions if necessary.
Finalization & Submission
Finalize the audit report and submit it to the tax authorities.
Common Questions About Income Tax Audits
income-tax-audit-services
Who requires Tax Audit?
A tax audit is mandatory under Section 44AB of the Income Tax Act for individuals, businesses, and professionals whose turnover or gross receipts exceed specified limits in a financial year. Currently, a business must undergo a tax audit if turnover exceeds ₹1 crore (₹10 crores if cash transactions are less than 5%), and a professional must undergo audit if receipts exceed ₹50 lakhs. It is also applicable to those opting out of presumptive taxation or declaring lower income than prescribed. Always consult a tax expert for the most updated thresholds.
What triggers the need for an income tax audit?
An audit is mandatory if your business turnover exceeds ₹1 crore or professional receipts exceed ₹50 lakh in a financial year.
What is Form 3CA/3CB and 3CD?
- Form 3CA: Used when the taxpayer’s accounts are audited under any other law.
- Form 3CB: Used when the taxpayer’s accounts are not audited under any other law.
- Form 3CD: A detailed statement of particulars required under Section 44AB.
What is the due date for submitting the tax audit report?
- The tax audit report must be filed one month before the due date for filing the income tax return, typically by 30th September.
What are the penalties for not conducting a tax audit?
- Failure to conduct a required tax audit can result in a penalty of 0.5% of turnover, up to a maximum of ₹150000.
Can the same audit report be used for multiple compliance requirements?
- Yes, if your accounts are audited under another law (e.g., Companies Act), the same report can be filed for tax audit purposes.
How can I prepare for an income tax audit?
- Maintain accurate financial records, ensure timely compliance with tax laws, and seek professional guidance to navigate the audit process effectively.
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