TAX AUDIT
The term ‘audit’ refers to a check, review, verification or inspection of a record, transaction, account etc. A tax audit is the process of verification and inspection of the accounts of a taxpayer to confirm their adherence to the provisions of the Income Tax law. The class of taxpayers listed under this section compulsorily has to get their accounts audited by a Chartered Accountant. Tax audit helps in review of transactions related to income, expenses, deductions, and taxes of the organization.
The threshold limit of Rs 1 crore for a tax audit is proposed to be increased to Rs 5 crore with effect from AY 2021-22 (FY 2020-21) if the taxpayer’s cash receipts are limited to 5% of the gross receipts or turnover, and if the taxpayer’s cash payments are limited to 5% of the aggregate payments.
IMPORTANCE OF TAX AUDIT
A Tax Audit will maintain the books of accounts and all other records regarding the revenue and expenditure properly.
Computation of tax and deductions becomes easy with the auditing.
Audit is a great way to make sure the credibility, fairness, and transparency of the accounting reports.
An Audit builds up the reputation of the company.
Government authorities accept audited statements as true and fair for the purpose of taxation.
Auditors can give concrete suggestions regarding the improvements of business on the basis of their findings in the record.
List of assets on which depreciation under Income Tax Act is claimed.
DUE DATE & PENALTY
A taxpayer has to obtain the audit report on or before 30th September of the relevant Assessment Year. Assessing Officer may impose penalty u/s 271B if the taxpayer doesn’t get his accounts audited or file the audit report. A minimum penalty can be 0.5% of the total sales, turnover or gross receipts, which can go up to Rs. 1, 50,000.
DOCUMENTS REQUIRED FOR TAX AUDIT
Pan Card
Aadhar Card
Bank Statements (Savings, Current & Loan Statements)
Book of Accounts: Cash Book, Purchases Book, Sales Book, Expenses Voucher etc.
List of Books of accounts
Details of the Fixed Assets & Capital Assets
Noc from last Auditor (If books of a/c is audited in last year)
Extracts or copies of important legal documents. (if any)
Copies of audited financial statements for previous year (If audited).
Letters of representation or confirmation received from the client.
Time Duration
It can take up to 4-5 working days in order to Income tax Audit.
Enquiry Person Details
Tax & Registration
Contact
- Office Address: Office No 13/784 W-1 Saket Nagar Near Sai Mandir Kanpur
- Phone Number: 8299724702
- Email ID: support@aspirefintax.com