Who is required to conduct an income tax audit and submit its report on e-filing ITR portal by September 30?
The deadline for eligible taxpayers to upload their income tax audit report is September 30, 2024. It's important to note that not all taxpayers have to adhere to this deadline, and some eligible taxpayers may not need to undergo an income tax audit at all. Failing to upload the tax audit report, if required, can lead to two consequences. Firstly, if you don't upload the tax audit report, your income tax return (ITR) will be considered defective. Secondly, filing the tax audit report after the deadline will result in a penalty under section 271B.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
Who is required to conduct a tax audit and submit the report by September 30, 2024
Tax audit provisions are laid out under section 44AB of the Income Tax Act, 1961. As per the law, the due date to file the section 44AB audit report for FY 2023-24 (AY 2024-25) is September 30, 2024."However, in case the taxpayer is also liable to furnish Transfer Pricing report in Form 3CEB, the due date to file the tax audit report is 31st October 2024," says Anita Basrur, Partner, Sudit K. Parekh & Co. LLP.
Basrur says that the tax audit under section 44AB is mandatory in the following cases:
Business: "Where sales turnover or gross receipts from such business exceed Rs 10 crores in the previous year then conducting tax audit is mandatory. However, the aforesaid limit is curtailed to Rs 1 crore where total cash receipts / payments (including sale & expenses) exceed 5% of the total receipts / payments," says Basrur.
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"This means that if more than 95% of receipts and expenses are conducted through banking channels i.e cash receipts as well as expenses are less than 5% of total receipts and expenditure, the threshold for conducting tax audit increases to Rs 10 crores," says Yogesh Kale, Executive Director, Nangia Andersen India.
Profession: "Where gross receipts from specified profession exceeds Rs 75 lakh in the previous year then tax audit is required to be conducted. However, the aforesaid limit is curtailed to Rs 50 lakh where total cash receipts / payments (including sale & expenses) exceed 5% of the total receipts / payments," says Basrur.
Presumptive Taxation: "Taxpayers who are eligible for presumptive taxation schemes (sections 44AD, 44ADA, 44AE, 44BB or 44BBB) but declare profits lower than what are required to be declared as the sections mentioned above, and whose income exceeds the basic exemption limit, must also get tax audit done," says Kale.
Will lot of taxpayers miss the tax audit report deadline due to this glitch on the ITR e-filing portal?
What happens if you don't submit tax audit report or submit it after September 30, 2024
According to Basrur, tax audit is a mandatory provision and taxpayers with the specified turnover / gross receipt limits are compulsorily required to get their books of accounts audited. In the event the tax audit is not conducted within the prescribed time limit, you may end up facing the following consequences:
Penalty: Says Kale, "If tax audit is not done / completed by the due date, the tax officer has the power to impose a penalty which is lower of the following:
(a) 0.5% of the total sales, turnover or gross receipts of business or of the gross receipts in profession;
(b) Rs 1.5 lakh.
Though there are no express provisions enabling or prohibiting filing of the tax audit report after the prescribed due date, practically it may be possible to file a tax audit report belatedly."
Defective ITR: If you don't upload the tax audit report even after the deadline (by paying a penalty), then your ITR can be considered as 'defective'. "Date of filing of the tax audit is a mandatory file in the ITR form and needs to be filled at the time of uploading their tax return forms failing which the tax authorities may treat the return of income as defective," says Basrur.
Taxpayers who need not conduct a full-fledged tax audit
Kale explains that while all taxpayers who are required to undergo a tax audit must do so, there are specific taxpayers who are exempt from undergoing a comprehensive audit."Every taxpayer, including a taxpayer who is required to get an audit done under any other law, is required to get a tax audit done if liable. However, the extent and form of reporting changes if a taxpayer already has gotten the audit done as per any other law. For example: The reporting requirement for the tax audit is much less (in Form 3CA) in case a taxpayer already has gotten audited under any other law (like Companies Act, 2013), as against other taxpayers to whom Form 3CB is applicable (full-fledged tax audit)," says Kale.
Taxpayers who are not required to conduct an income tax audit
The following categories of taxpayers do not need to conduct an income tax audit: Taxpayers with no business or professional income. "In cases where the taxpayer opts to pay tax under the presumptive scheme, though the gross turnover / sales may exceed the specified threshold, the taxpayer will not be subject to tax audit under section 44AB," says Basrur. Basrur explains with an example: In the case of business, where gross sales of taxpayers are Rs 2.5 crore and total cash receipts / payments exceed 5% of total receipts / payments, ideally such taxpayers should be subject to tax audit. However, if a presumptive scheme under section 44AD is opted, such a taxpayer is required to consider 8% of total sales as income and compute on such income. "In such a scenario, tax audit shall not be mandatory," she says.Taxpayers with professional income if their sales receipts/gross turnover do not exceed the limits as prescribed. #sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
This story originally appeared on: India Times - Author:Faqs of Insurances
