Everything about Tax Audit in India

The simplest meaning of Tax Audit is an examination of your tax return by an IRS (Indian Revenue Service) officer. An IRS officer will verify your income and also verify the deduction in profit that it is accurate or not. For example, some taxpayers may keep their cash income confidential that may lead to tax penalties. This topic is covered under section 44AB of The Income Tax Act, 1961.

Now let's discuss about Tax Audit in detail

Objectives of Tax Audit in India

These are the various objectives:

• An analysis of the accuracy of income tax returns.  

• It checks the malpractice and fraud in filing income tax returns.

• It ensures proper maintenance and correctness of accounts by the tax auditor.

• It practices the mythological examination of accounts.

Who is covered by Tax Audit in India?

These are certain classes:

• A business owner with gross receipts, turnover or total sales exceeding Rs. 1 crore.

• An owner who has opted for the taxation scheme with the receipt, turnover or total sales exceeding Rs. 2 crores or more.

• A taxpayer whose business is eligible for taxation and claims the profits that is lesser than the prescribed limit under the taxation scheme.

• The owner who has qualifies the presumptive taxation scheme but decided to opt out after a specific period. Then he or she will lose the ability to revert to the likely taxation scheme for the term of five years of assessment.

• A professional employee i.e. engaged in any profession and his or her gross receipts in a year are of Rs. 50 lakhs and above.

• An employee of an organization who is eligible for paying tax and he or she claims the profit that is less than the prescribed limit under the taxation scheme. 

Are you still confused on who all are covered under Tax Audit, then contact our team to know more on this.

Why do taxpayers receive Tax Audit penalty?

There are different reasons for receiving tax penalty:

• Citizens ignore the rules and the regulations prescribed by the IRS.

• A person who keeps his or her tax payment under reported.

• Misstate the value of his or her property by an individual.

• A citizen fails to pay the tax by the deadline.

• A person keeps confidential the gift or the estate.

• The business owner who keeps the other reportable transactions under reported.

What is the process for filing the Tax Audit report?

Here is the procedure:

• The C.A. (Chartered Accountant) hired for conducting the audit of an individual or the organization to present the tax audit report online using his or her official login credentials.

• The taxpayer has to mention the relevant information of the C.A. in their login platform.

• Once the audit report uploaded by the auditor, it has to either accepted or rejected by the taxpayer on their login platform. If the taxpayer rejected the audit report, then the entire story has to be repeated until he or she accept the audit report.

• The report of the income return has to be filed before 30th November because it is an assessment year of the taxpayer and 30th September for other taxpayers.

If you are willing to file the tax audit report then contact Enterslice

Conclusion

We could say that the importance of the tax is essential for the economical development of India. The government of India is very strict for the rules and the regulations under tax audit. Defaulters should face the penalty if they don't return the fee. Hence, a business person must run their business with honesty.

For more information contact us at Enterslice.