ITR Filing: Deadline For Those Requiring Audit Extended Till Nov 7. Find Out Here If You Require One

If a particular business or a salaried individual makes a turnover or a income above the stipulated limits a tax audit is required, according to Section 44AB of the Income Tax Act.

New Delhi: The Central Board of Direct Taxes (CBDT), under the Department of Revenue, Ministry of Finance, has extended the deadline for filing income tax returns for Assessment Year (AY) 2022-23 till November 7, 2022, in cases where an audit is required. This is the third extension granted by the tax authority. The September 30 deadline was extended to October 7 and then, October 31 earlier.

WHAT’s INCOME TAX AUDIT & WHO DOES THE AUDIT?

A tax audit is carried out by a chartered accountant who will scrutinize the account books, receipts, invoices and related articles of a business or a salaried professional. The chartered accountant will thoroughly go through the books and analyse if the income tax rules have been followed by the taxpayer.

“The auditor is required to furnish an audit report in Form 3CB along with Form 3CD. Form 3CD is a questionnaire, wherein the auditor needs to answer several questions regarding the accounts of the taxpayer like the method of accounting, type of accounts maintained, status of TDS compliances, types of expenses which should not be allowed as an expense, etc. The auditor needs to file this report online which the taxpayer will need to accept before filing his/her tax return,” explained Sandeep Sehgal, Partner-Tax, AKM Global, reported Moneycontrol.

DO YOU NEED TO GET YOUR ACCOUNTS AUDITED?

If a particular business or a salaried individual makes a turnover or a income above the stipulated limits a tax audit is required, according to Section 44AB of the Income Tax Act.

Section 44AB Of The Income Tax Act Reproduced Verbatim:

Every person,—
(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year; or
(b) carrying on profession shall, if his gross receipts in profession exceed 50 lakh rupees
in any previous year; or
(c) carrying on the business shall, if the profits and gains from the business are deemed
to be the profits and gains of such person under section 44AE or section 44BB or section 44BBB,
as the case may be, and he has claimed his income to be lower than the profits or gains so deemed
to be the profits and gains of his business, as the case may be, in any previous year; or
(d) carrying on the profession shall, if the profits and gains from the profession are deemed
to be the profits and gains of such person under section 44ADA and he has claimed such income to be
lower than the profits and gains so deemed to be the profits and gains of his profession and his income
exceeds the maximum amount which is not chargeable to income-tax in any previous year; or
(e) carrying on the business shall, if the provisions of sub-section (4) of section 44AD are applicable
in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year, get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed:
Provided that this section shall not apply to the person, who declares profits and gains for the previous year in accordance with the provisions of sub-section (1) of section 44AD and his total sales, turnover or gross receipts, as the case may be, in business does not exceed two crore rupees in such previous year:
Provided further that this section shall not apply to the person, who derives income of the nature referred to in section 44B or section 44BBA, on and from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later:
Provided also that in a case where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under this section.

Explanation.—For the purposes of this section,—
(i) “accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288;
(ii) “specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the due date for furnishing the return of income under sub-section (1) of section 139

APPLICABILITY OF SECTION 44AB IN LAYMAN’s TERMS: THESE PERSONS SHOULD PERFORM A TAX AUDIT

• Any person pursuing business where the total sales exceed Rs 1 crore in any previous year. Those people who opted the presumptive taxation scheme are exempted from this provision.
• Any person pursuing a profession where the gross profits exceeds Rs 50 lakh in any previous year.
• A person who is considered eligible for the presumptive taxation scheme, and who claims that the profits and gains for the respective business is lower than what is computed in accordance with the presumptive taxation scheme and his/her income exceeds the amount that is taxable. This provision is applicable to the taxpayers who opt for presumptive taxation scheme other than the one who choose the scheme under Section 44AD and whose sale or turnover is limited to Rs 2 crores.

“Every person carrying on business where the total sales exceed Rs 1 crore is required to carry out an audit. However, if the total of such sales received or payment made (as the case may be), in cash, does not exceed 5 percent of the total amount, then the threshold required for an audit goes up to Rs 10 crore,” said Sandeep Sehgal in the report.