1. Summary
  2. Objectives of tax audit
  3. Purpose of Tax audit
  4. Tax Audit Services
  5. The Procedure for Filing Tax Audit Report


Tax Audit refers to the verification of the books of accounts of the payer. The auditor evaluate the books to make decisions on taxation compliances which are administered by the assessee. Because the name itself suggests, a tax audit is an examination or review of accounts of business or profession administered by taxpayers from a revenue enhancement viewpoint. It makes the method of financial gain computation for filing of comeback of financial gain easier.

Objectives of tax audit

Tax audit is conducted to attain the subsequent objectives:

  • Ensure correct maintenance and correctness of books of accounts and certification of a similar by a tax auditor
  • Reporting observations/discrepancies noted by tax auditor once an organized examination of the books of account
  • To report prescribed info like tax depreciation, compliance of varied provisions of revenue enhancement law, etc.

All these modify tax authorities in confirming the correctness of revenue enhancement returns filed by the payer. Calculation and verification of total financial gain, claim for deductions, etc., additionally becomes easier.

Purpose of Tax audit

A tax audit determines whether or not money records and transactions are properly recorded and accounted for. This, in turn, ensures that the records replicate the particular financial gain of the payer which the claims for deductions created units correctly.

The following person is obligatorily needed to induce their accounts audited.

In the case of professionals:

  • If your gross earnings are over in a very twelvemonth
  • If you continue a profession eligible for presumptive taxation (Section 44ADA) and you have got claimed that your profits were under the stipulated limit, and financial gain is over the most quantity up until that revenue enhancement isn’t guilty.

In the case of Entrepreneurs:

  • If your turnover or gross earnings are over.
  • If you’re running a business that is eligible for presumptive taxation (Section 44AE, 44BB, or 44BBB) and you claim that profits or gains are under the stipulated limit, then an audit is important.
  • If your business is qualified for presumptive taxation as per Section 44AD of the revenue enhancement Act and
  • You declare that the< subject financial gain has been below the boundaries given as per the presumptive taxation and your financial gain is over the brink limit
  • If your turnover or gross receipts exceed ₹2 crores within the twelvemonth

Tax Audit Services

There are several laws are written in India that govern completely different sorts of audits like revenue enhancement audit, cost audit, stock audit, company, or statutory audit as per the businesses Act, 2013. Revenue enhancement audit evaluates whether or not a person or company has filed tax returns of the assessment year fitly. Section 44AB of the revenue enhancement Act of 1961 lays down the provisions for revenue enhancement audits.

Taxpayers who get their accounts audited below law apart from Section 44AB of the revenue enhancement Act of 1961 don’t have to be compelled to get their accounts checked for the aim of a revenue enhancement audit. During this style of case, the accounts that are audited below the other law will be given as a tax audit report for revenue enhancement filing. The audit report should be submitted before the stipulated date.

The following alternative sections below the revenue enhancement Act of 1961 additionally lay down laws with revenue enhancement audit in India:

  • Section 44BB: For Non-Resident Indians (NRIs) concerned within the business specializing within the mineral oils trade, like exploration.
  • Section 44BBB: International Company that’s concerned within the business of civil construction etc. or in specific power comes.
  • Section 44AD: Any business except those businesses that are is given below Section 44AE.
  • Section 44ADA: This section covers the laws with relevancy the revenue enhancement audits for eligible professionals.
  • Section 44AE: This section focuses on businesses specializing in leasing, hiring, and plying products carriages.

The Procedure for Filing Tax Audit Report

The tax audit filing procedure are listed below:

  • The tax audit report should be filed on or before the pre-determined date of filing the revenue enhancement come back. The date for filing the revenue enhancement returns are:
  • Once the auditor uploads the tax audit report, the payer either needs to settle for or reject it on their login portal. Just in case the payer rejects the tax audit report, the whole method should be continued till he or she accepts the tax audit report.
  • The payer additionally has to mention the relevant info concerning their accountant in their login platform.
  • The auditor or accountant (CA) allotted to conduct a tax audit of a person or organization has to gift a tax audit report online, by victimization his/her official login credentials.
  • Thirtieth Gregorian calendar month of the following assessment years for taxpayers engaged in a global dealing.
  • Thirtieth Sept of the following assessment year for alternative taxpayers.

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BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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