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Income Tax Audit

Income Tax Audit

What is a tax audit?

There are several types of audits being carried out under various laws such as company audit/statutory audit carried out under company law provisions, cost audit, stock audit etc. Likewise, income tax law also obligates an audit known as ‘Tax Audit’. As the name itself proposes, a tax audit is an inspection or evaluation of accounts of any business or occupation carried out by taxpayers from an income tax lookout. It makes the procedure of income computation for filing of return of income at ease.

Aims of tax audit

Tax audit is carried out to realize the following aims:

Make sure appropriate maintenance and accuracy of books of accounts and accreditation of the same by a tax auditor

Reporting interpretations/inconsistencies noted by tax auditor post a systematic inspection of the books of account

To state approved information for instance tax depreciation, obedience of various necessities of income tax law etc. All these qualify tax authorities in confirming the accuracy of income tax returns filed by the taxpayer. Evaluation and authentication of total income, right for deductions etc. also becomes stress-free.

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Benefits of Tax Audits in India

Proper Maintenance of Transaction

Tax Audit requires the updated data of every day transactions and financial records that helps in effortlessly maintaining the financial affairs’ records

Reduces Fraudulent Tax Practices

Through properly managed and calculated Tax Audits, the chances of facing any taxation frauds get reduced

Appropriate Cash Flow Management

n the process of Auditing the Taxations, the concerned Individual or Business Venture can track the total income and financial claims from the marketplace in a proper manner

Legal Facilitation

Income Tax Audits are the credentials that can be used to any Assessing Officials or the Regulating Authorities and getting the beneficial Govt. schemes

Time Saving

While conducting the Tax Audit in a proper manner, a business organization will make the process easier for the country’s taxation regulatory board and saves a lot of time by eliminating the administrative hassles

Why Us?
How do we work?
Step 1

Fill our Registration Form & Make the Payment

Step 2

Get a Call from our In-House CAs & Taxation Experts

Step 3

Submit the Documents, and Records as Requested

Step 4

The CAs will Analyze, and Begin with the Tax Audit Process

Step 5

Following the Completion of the Tax Audit, we will get your Approval for the same

Step 6

Finalised and Approved Tax Audit report will be submitted to the Income Tax Department

FAQ For Income Tax Audit

What happens if an individual is needed to get his accounts audited beneath any other law for instance statutory audit of companies under company law provisions ?

In such circumstances, the taxpayer is not required to get his accounts audited once more for income tax matters. It is adequate if accounts are audited under such other law prior the due date of filing the return. The taxpayer can deliver this suggested audit report under Income tax law.

What comprises an Audit report?

Tax auditor shall provide his report in a recommended form which could be both Form 3CA or Form 3CB where:

  • Form No. 3CA is equipped when an individual carrying on business or profession is already instructed to get his accounts inspected beneath any other law.
  • Form No. 3CB is equipped when an individual carrying on business or profession is not needed to get his financial records inspected beneath any other law.

In the instance of whichever of the aforesaid audit reports, tax auditor must provide the recommended particulars in Form No. 3CD, which forms part of audit report.

How and when tax audit report shall be provided?

The tax auditor shall supply tax audit report online by making use of his login details in the capacity of ‘Chartered Accountant’. Taxpayer shall also supply CA particulars in their login portal. When the tax auditor uploads the audit report, similar should either be accepted/rejected by taxpayer in their login portal. If prohibited for any cause, all the processes need to be carried out again till the audit report is acknowledged by the taxpayer. You must file the tax audit report on or before the due date of filing the return of income. It is 30 November of the succeeding year in case the taxpayer has entered an international transaction and 30 September (extended to 31 October for AY 2020-21) of the succeeding year for other taxpayers.

What is the Penalty of non-filing or delay in filing tax audit report?

If any taxpayer is needed to carry out the tax audit but fails to do so, the least of the following may be levied as a penalty: 1. 0.5% of the entire sales, revenue or gross earnings 2. Rs 1,50,000