When TAX Audit is Applicable?
- Carrying on Business shall and turnover exceeds Rs. 100 Lac in any financial year.
- Carrying on Profession and gross receipts in profession exceed 25 Lac in a financial year.
- Must carry on business or profession.
- Maintenance of books accounts is mandatory as per Income tax act.
- A business or profession should be carried with a motive of profit.
- Profit or gain computable under Chapter IV.
- Income is Taxable or Loss allowable under Act.
Who are required to get their accounts audited?
- Partnership Firm.
- Association of person.
- Local Authority.
- Section -8 company.
- Trust / NGO/ Society.
What is included in turnover for TAX AUDIT?
- Duty drawback received on export sales shall be considered as part of Turnover in a financial year.
- Interest income by money lender.
- Foreign fluctuation income by an exporter shall be considered as part of turnover in a financial year.
- Advance received & forfeited from customers.
- If excise duty included in turnover it should be again debited in the profit and loss account.
What is excluded in turnover for TAX AUDIT?
- Sale/ Purchase of Fixed Assets.
- Sale Proceeds of the Assets Held as Investments.
- Rental Income residential or commercial property.
- Interest income.
- Reimbursement of expenses as receipt.
In India, annual audit seems time consuming process and expensive process to businessmen. Tax audit firms in India can verify performance of the business with industry standards.
For example if your business is setup in Delhi, then tax audit firm in Delhi can review your financials and they can also recommend ways to improve.
Tax audit is required to be conduct by every eligible assessee. It is compulsory under the Income Tax Act. Tax audit has to be conducted by the tax consultants in India (Chartered Accountant only).