Tax Audit

What is Tax Audit:

A tax audit is like a detailed check-up for your finances conducted by a tax professional. It ensures that your financial records and taxes are in line with the rules set by the Income Tax Act, 1961. The tax auditor, usually a Chartered Accountant, reviews your financial statements to make sure everything is accurate and lawful.

Who Is Required to Undergo Tax Audit:

If your income crosses a certain limit, you must get a tax audit done by a Chartered Accountant. Initially, this limit was Rs. 1 crore for businesses and Rs. 50 lakhs for professionals. However, it has been revised to Rs. 5 crores from FY 2019-20 and further increased to Rs. 10 crores from FY 2021-22.

Penalty For Non-Compliance:

Not getting your accounts audited can lead to hefty penalties imposed by the tax department. The penalty can be either 0.5% of your total sales, gross receipts, or turnover, or a flat fee of INR 1,50,000, whichever is lower.

Benefits Of Tax Audit:

• Banks and other financial institutions often ask for audited financial statements before approving loans, so a tax audit can speed up the loan approval process.
• Having audited accounts reduces the chances of getting into trouble during tax inspections. Even if you're audited, the tax authorities trust audited accounts more than non-audited ones.
• A tax audit boosts your business credibility and opens up more business opportunities.

Services provided under Tax Audit:

• Conducting audit under Section 44AB of the Income Tax Act and filling out required forms and certifications.
• Helping you prepare and file income tax returns with the tax authorities.
• Filing related certificates and forms as needed.
• Providing advice on tax audits, compliance, and tax planning strategies.