Relevant Clause of 44AB: Description: Clause (a) In case the assessee is carrying on business and his total sales, turnover or gross receipts as the case may be, exceeds one crore in the relevant previous year. 17 [Audit of accounts of certain persons carrying on business or profession.. 18 44AB. 3CB [See rule 6G(1)(b)] Audit report under section 44AB of the Income -tax Act 1961, in the case of a person referred to in clause (b) of sub - rule (1) of rule 6G A third threshold limit of Rs 5 crores has been added in order to reduce compliance burden on small retailers, traders, shopkeepers who comprise the MSME sector. Recently, we have discussed in detail section 44AA (maintenance of accounts by certain persons carrying on profession or business) of IT Act 1961. Maintained by V2Technosys.com, Taxguru Consultancy & Online Publication LLP, 509, Swapna Siddhi, Akurli Road, Near Railway Station, Kandivali (East), Section 44AB: An Analysis of Tax Audit provisions after Finance Act, 2020, Summary of GSTR 3B Compliance post the 40th GST Council Meeting (Due dates, Interest and Late fees), Bonafide switch from Percentage completion to Project completion method allowable, CIT cannot ask AO to look into issues not within the purview of limited scrutiny, Challenge to vires of Circulars & Constitutional Validity of Section 9(a)(ii) of Direct Tax Vivad se Vishwas Act, Due Dates as per Income Tax Act 1961 expiring on 31st December 2020? 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; What is the implication of "any previous year"? Even the Old Regime and NEW Regime too. Tax audit clause 44ab(d) or (e) This query is : Resolved Report Abuse Follow Query Ask a Query. d) Tax audit is in purview of 44AD. 2. The audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. Disclaimer: The information contained in this article is intended solely for the dissemination of information and doesn’t aim at soliciting work in any manner. However, w.e.f. Again his total sales, turnover or gross receipts is above Rs. My question is regard to stock option trading – if I purchase a stock option on Sharekhan, and make a loss, is it deemed there is a cash payment? New Rule 6G, inserted in the Income-tax Rules, prescribes the Forms of Audit report for the above purpose. thanks . Salil. Section 44AB of the Income Tax Act, 1961 includes the provisions for the tax audit. 3CA - Audit report under section 44AB of the Income-tax Act, 1961, in a case where the accounts of the … The Section 44AB of the Income Tax Act enjoins provisions regarding tax audit under IT Audit. The new proviso to section 44AB providing the enhanced turnover limit of Rs. In this scenario, person will not require to audit as he satisfy condition stated in Sec 44 AB [a] and Sec 44 AD [1], ‘b] His total profit or income for that business which is eligible business and, person is eligible assessee, is below 8 % of 6 % [ if his gross total turnover or receipts recd in banking mode]. 2] Person whose total cash receipts and total cash payments does  exceeds 5 % of such receipts or payments. A] If person carrying on business, his total total sales, turnover, gross receipts is Rs. ​​​​​​​The report of the tax audit conducted by the chartered accountant is to be ​furnished in prescribed form i.e. Provisions of Sec 44AB will not applicable to him because Sec 44 AB provided clearly that –, “ 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 the 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. However GST Audit will be applicable if registered under GST (GST Audit threshold limit being Rs 2 crore). Tax Audit under Section 44AB of the Income Tax Act is the examination and review of the books of accounts of a taxpayer having income from business or profession.The taxpayer should appoint a practicing CA i.e. In case of a person carrying on profession, tax audit is required if his gross receipts in profession exceeds Rs. 4. Section 44AB of the Income Tax Act deals with the audit of accounts of certain individuals. Thus, where audit is done under other law then 3CA plus 3CD is applicable instead of 3CB plus 3CD. [ii] whose total turnover or gross receipts in the previous year does not exceed an amount of two crore rupees. 3CB. The audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. 50 lakh in case of the profession, as the case may be. Tax Audit l Section 44AB of Income Tax Act,1961 l New Tax Audit l Tax audit limit I GST Sathi - Duration: 8:43. 3CA/3CB and ​3CD. In other words for a normal business who has not opted for declaring profit under 44AD (presumitive income) even if it is less than 8% 44AB(e) may not be applicable as 44AD(4) is not applied. If the turnover exceeds INR 1 Cr (INR 5 Cr from AY 20-21), tax audit is applicable as per Section 44AB(a). If my Interest Income is over and above 1 cr, Will I need to get audited my books under sec 44AB. Does it mean that if the turnover exceeds Rs. 92/2020- CT to 94/2020- CT, Extend due dates for Income Tax Audit & Returns for AY 2020-21, Extend Tax Audit/ITR due dates for AY 2020-21, ICAI requests for extension of various Income-tax due dates, Extend Due Dates for Tax Audit and Income Tax Return Filing, Extend Income Tax Audit & ITR Due dates for AY 2020-21, Extend due dates of Audit Reports, ITRs, GST Returns, VSV Scheme, Extend due date for filing ITR & Tax Audit Report- AY 2020-21, Extend Tax/TP Audit & ITR Due dates for AY 2020-21, Open letter for extension of Due dates under Income Tax and GST, Gross receipts from profession in the financial year, Profits and gains (as a % of total Gross receipts), Total sales, turnover or gross receipts in the Financial year, Profits and gains (as a % of total sales, turnover or gross receipts). This is the perfect analysis of the 2 sections. person referred to in clause (b) of sub-rule (1) of rule 6G 3CD Statement of particulars required to be furnished under section 44AB of the Income-tax Act, 1961 BACKGROUND The tax audit was introduced by section 11 of the Finance Act, 1984, which inserted a new section 44AB with effect from 1st April, 1985 [Assessment Year 1985-86]. (b) in the case of a person who carries on business or profession, but not being a person referred to in clause ( a ), be in Form No. Because , Sec 44 AD [1] provisions applicable to eligible business. All Rights Reserved. Clause 44AB(c)-iii 5. [ that above Rs. Clause 44AB(a) 2. Further some professionals are of an opinion that no audit is required in such a case. 2 crore, provisions of Sec 44 AD [1] is not applicable to him. though his total cash receipts and total cash payments does not exceeds 5 % of such receipts or payments, but he is showing his income or profit from eligible business below 8 % or 6 % , as the case may be, he is required to get his books of account audited as per provisions of Sec 44 AD [1]. However, according to section 271B​, no penalty shall be imposed if reasonable cause for such failure is proved. Is it really so? It is strange and injustice to small assessee. person is eligible assessee, is below 8 % of 6 % [ if his gross total turnover or receipts recd in banking mode] Salil (Querist ... 2. Clause (c) It just discussion and study purpose. Difficult to Genuine Tax Payers, Discussion on GST Notification No. While the turnover limit for Sec 44AB is INR 1 Cr, turnover limit for Sec 44AD is INR 2 Cr. (Read Sec 44AD(4) & 44AD(5)). Disclaimer : I tried to put analysis of the provisions of sec 44 AB and 44 AD of the Income Tax Act, 1961 and its applicability on assesses. should make suitable amendments in the Income Tax Act, 1961 whrereever it is necessary. Clause 44AB(c)-i 4. 1 Crore to Rs. 3CA or 3CB) and such further prescribed particulars (in Form No. 2 crores. So because of such amendment there some strange situation may arise which CBDT should clarify. Plz read the bare act again. The penalty shall be lower of the following amounts: (a) 0.5% of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such year or years. However, tax audit may be applicable under clause (b), (c), (d) & (e) when Sec 44AB is read with Sec 44AD. Is such a case, it shall be sufficient if such person gets the accounts of such business or profession audited under such other law and obtains the report of the audit as required under such other law and also a report by the chartered accountant in the form prescribed under section 44AB, i.e., Form No. Can such asseesse file tax audit report if they want? According to third proviso to section 44AB, if a person is required by or under any other law to get his accounts audited, then he need not get his accounts audited again to comply with the requirement of section 44AB. Clause (c) of section 44AB, inserted by the Finance Act 1997 w.e.f. 94/2020-Central Tax, Removal of Director Under Companies Act, 2013 with Notice & Resolution formats, GST Moving Towards Inspector Raj……. 25 lacs. Clause 8: Indicate the Relevant Clause of section 44AB under which the audit has been conducted: Verify the applicability of clauses of sec. That is in FY 2015-16, if you have opted 44AD and not opted in FY 2016-17 ,then 44AD(4) applies ,meaning thereby tax audit is applicable per section 44AD(e). Audit will not be applicable since the assessee can go for presumptive taxation scheme u/s 44AD. All Rights Reserved. The chartered accountant conducting the tax audit is required to give his findings, observation, etc., in the form of audit report in Form Nos. The two major amendments made by Finance Act, 2020 in respect of tax audit are as follows. This provision is​ not applicable to the person, who opts for presumptive taxation scheme under section 44AD​ and his total sales or turnover doesn’t exceed Rs. Just Check up before Panicking, Extend Income Tax, Companies & CGST Act compliance due dates, Provisions for modifying PAN based IEC introduced, Companies (Compromises, Arrangements & Amalgamations) Second Amendment Rules, 2020, Disqualification, Striking off And Cancellation of DIN, Changes in GST Rules relating to Registration, ITC Returns and E Way Bills, Practical issues on ITC after Notification No. GST SATHI 41,833 views. It means in above case, if person shows his profit below 8 % of 6 % of his total sales etc, he will not require to get his books of account audited . 2021-22…Please refer Bare Act and reply please after checking. The examination is conducted to ensure that the taxpayer has properly maintained the books of accounts and other records. Thanks. 44AB(e) may not applicable unless the assessee had earlier opted for 44AD and then comes out of it. So unfair in both amended for low taxable income people compared to middle and high taxable income. Section 44AB. Though meticulous care has been taken but the author assumes no liability in respect of any loss/damage incurred while acting on the basis of information provided. Section 44AB of the Income Tax Act contains provisions pertaining to the tax audit under the Income Tax Audit. Clause (a) of Section 44AB talks about a person carrying on business whereas clause (b) talks about a person carrying on a profession. Meaning of Certain Terms used in section 194J . Thus, he has to compulsorily get his accounts audited u/s 44AB(e) for that AY and subsequent 5 AYs if the turnover ≤ 2 crores and Total income > basic exemption limit during such 6 years. These amendments of 44AB is applicable from A.Y. With effect from 01/04/2020, that is from assessment year 2020-21, this provision is amended as below: The threshold limit has been revised to increase it for a person carrying on business from Rs. The Finance Act 2020 has made amendment in section 44AB by inserting a proviso in clause (a) of Section 44AB. A) For Resident Individual /HUF/Firm (excl LLP) ( i.e. Is it really so? Penalty for not getting accounts audited under Section 44AB. AY 2020-21 with the help of a chart as follows, (You may also want to read Sec 44AD AND 44ADA before going through the chart). 3CD. 30th September of the relevant assessment year. Well i have come across different views on this Issue…, itatonline.org/articles_new/demystifying-applicability-of-tax-audit-u-s-44ab-of-the-income-tax-act-1961/. (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. assessment year 1998-99, provides that in the case of an assessee carrying on a business of the nature specified in sections 44AD, 44AE , tax audit will be required, if he claims his income to be lower than the presumptive income deemed under the said sections. The five clauses of section 44AB under which tax audit can be carried out are – a. 44AB. Clause (c) of section 44AB, inserted by the Finance Act 1997 w.e.f. 1) Up to AY 2019-20, a person carrying on business was compulsorily required to get his accounts audited by a chartered accountant, if his total sales, turnover or gross receipts (as the case may be) in business for the year exceeds Rs. 3CB and the prescribed particulars are to be reported in Form No. 3CD) on or before the ‘specified date’. In this scenario, person will not require to audit as he satisfy condition stated in Sec 44 AB [a] and Sec 44 AD [1] ‘b] His total profit or income for that business which is eligible business and. Where a person does not declare profit in accordance with Sec 44AD(1) in any AY (i.e. FORM NO. So if the provisions of sec 44 Ab and provisions of Sec 44 AD is not applicable to him, then there is not any limit regarding % of profit to Total Sales. Can you please tell me their slabs or provisions 1. In this scenario, . 13 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 14 [twenty-five] lakh rupees in … Limit / Criteria. Kindly help at the earliest. Section 44AB gives the provisions relating to the class of taxpayers who are mandatorily required to get their accounts audited from a chartered accountant. In other words, if certain individuals meet the requisites as prescribed under Section 44AB, then these individuals will have to ensure that their accounts are audited by a certified Chartered Accountant. If any person who is required to get his audit done under this section but fails to do so before the specified date shall be liable to penalty under section 271B of 0.50% of the turnover/gross receipts subject to a … Under section 44AB of the Income-tax Act, 1961, it is obligatory for certain specified persons, carrying on business or profession to get their accounts audited by an ‘accountant’ and submit a copy of the ‘audit report’ in prescribed form (Form No. The audit conducted by the chartered accountant of the accounts of the taxpayer in pursuance of the requirement of section 44AB … (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 assesse of the previous year relevant to an assessment year, means date one month prior to the due date for furnishing the return of income under sub-section (1) of section 139. Clause. Section 44AB. 12(a) and (b) of Form 3CD Para No. Recent Update: For businesses with an annual turnover of less than Rs 5 crore, filing of GSTR-9C for FY 2018-19 has been waived off. Therefore, it is proposed to amend these sections so that reference to the monetary limit specified in clause (a) or clause (b) of section 44AB of the Act is substituted with Rs. Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. AY 2020-21 this due date of filing return of income for tax audit assessees has been amended to 31st Oct,2020. In such case, there are two possibilities as below : ‘a] His total profit or income for that business which is eligible business and person is eligible assessee, is more than or equal to 8 % of 6 % [ if his gross total turnover or receipts recd in banking mode] . 1 crore. Copyright © TaxGuru. 2] His aggregate of all payments in cash during the previous year does not exceeds 5 % of such payments. (2) The particulars which are required to be furnished under section 44AB shall be in Form No. B] ] If person carrying on business, his total total sales, turnover, gross receipts is Rs. The audit conducted by the chartered accountant of the accounts of the taxpayer in pursuance of the requirement of section 44AB​ is called tax audit. So from the above discussion, the summary of the provisions are tabulated as below: So from the above discussion and table, the small eligible asseesee who has eligible business, though his turnover is below 2 crore , and his total cash receipts and cash payments is below 5 % of such receipts or payments, is required to get his books of account audited as per sec 44 AD and assessee whose turnover is more than 2 crore , and if his total cash receipts and total cash payments is less than or equal to 5 % of such receipts or payments, is not required to get his books of account audited u/s 44 AB ,So his burden of compliance is reduced but assessee whose turnover is below 2 crore , his burden of compliance is not reduced. So this rule change is NOT applicable for AY 20-21? 2nd Para First line is incorrect it should be “With effect from 01/04/2020, that is from assessment year 2021-22” instead of “With effect from 01/04/2020, that is from assessment year 2020-21”. This was accompanied by a amendment in Explanation to Sec 44AB. Like you rightly said this 44AB amendment is no useful for turnover less then 2 cr but business having turnover between 2 to 5 can get benefit under this clause. 1. As per the new proviso, the tax audit turnover limit would be INR 5 Crores in case the following two conditions are satisfied: 1 crore in the previous year. [Under section 44AB] In this article, we will cover every aspect of tax audit as per income tax act. (b) A person carrying on profession: The total gross receipts exceeds rs. 17 [Audit of accounts of certain persons carrying on business or profession.. 18 44AB. From financial year 2016-17 this limit is raised to Rs. 5 crores for the tax audit is inserted below clause (a) to section 44AB. 8:43. 3CA and Form 3CD. a) In case of business, if turnover/gross receipt exceeds Rs. Form No. I always believe that any analysis should begin by reading the bare act. ‘a] His total profit or income for that business which is eligible business and person is eligible assessee, is more than or equal to 8 % or  6 % [ if his gross total turnover or receipts recd in banking mode] . Is the new amendment giving an option to assessee (who satisfy the conditions) to refrain from filing tax audit report? There is some ambiguity in this case. Thank for such a wonderful chart and explanation. Since in todays world many small salaried or business have some commitment under 80C and other deductions which results into lower Net Taxable Income under Old Regime. c) Tax audit is in purview of 44AE, 44BB & 44BBB . 3CB - Audit report under section 44AB of the Income-tax Act, 1961, in the case of a person referred to in clause (b) of sub-rule (1) of rule 6G; Form No. The author shall not be responsible for any extracts or references made. Form No. 9. A tax audit is an audit which is necessary by the Income Tax Act, if the annual gross turnover/receipt of the taxpayer exceed the specified limit. Kindly confirm. In such situation, there are two more situation may arise –. In such situation , following situation may arise: 1] Person whose total cash receipts and total cash payments does not exceeds 5 % of such receipts or payments. In order to rationalisation and to reduce compliance burden on small and medium enterprises, Finance Act 2020 has amended the clause (a) of section 44AB,in whichit increased the threshold limit for applicability of Tax Audit, for a person carrying on business and increased it from one crore rupees to five crore rupees, where,- Thanks. Or is it a mandatory exemption? CA Shirish Vinchurkar – Chartered Accountants, Chalisgaon, email : casjv12@gmail.com. 5 crore if the following conditions are satisfied –. but New Regime is better for net taxable income above 15Lacs. Its available online on the income tax departments website. 08 September 2014 I have to Audit But there is a problem with in Auditor info.Software is showing there 6 option. The above article is based on the authors private view. —For the purposes of this section, —. Yes, will make necessary changes. Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. For any queries or suggestions, the author can be reached at tanweer.rk@gmail.com. According to the amendment the due date of filing tax audit report will be one month prior to the due date for furnishing the return of income u/s 139(1). 1. 94/2020-Central Tax, Removal of Director Under Companies Act, 2013 with Notice & Resolution formats, GST Moving Towards Inspector Raj……. Sir agar mera turnover 1.26 crore hai and Profit ratio 3% hai and all receipts cash then audit under which section. In this scenario, person will not require to audit as he satisfy condition stated in  Sec 44 AD [1]. 23 of the Guidance Note[2005 Edition] Clause 17(h) of Form 3CD Para 35 of the Guidance Note (Subsequent changes have been made in section 40A(3) by the Finance Act, 2008 and Finance (No. I had the same thought regarding this. If in this case the aggregate cash receipts and aggregate cash payments do not exceed 5% then the threshold limit will become Rs 5 crores and thus Audit u/s Sec 44AB(a) won’t be applicable. The assessee can opt for presumptive taxation u/s 44ADA. It is very say that new amendments in 2020 is not suitable for small taxpayers compared to Middle and Higher class taxpayers. Maintained by V2Technosys.com, Taxguru Consultancy & Online Publication LLP, 509, Swapna Siddhi, Akurli Road, Near Railway Station, Kandivali (East), Amendment in Section 44AB & applicability for AY 2020/21- Analysis, How to fill ITR 3 from Tax Audit Report – An Analysis, Income Tax TCS provision – Section 206C[1H] – wef 01/10/2020, Issues in Tax Audit – Difference in ITC in GSTR 2A & GSTR 3B, Conditions for claiming Income Tax deductions under chapter VIA, Bonafide switch from Percentage completion to Project completion method allowable, CIT cannot ask AO to look into issues not within the purview of limited scrutiny, Challenge to vires of Circulars & Constitutional Validity of Section 9(a)(ii) of Direct Tax Vivad se Vishwas Act, Due Dates as per Income Tax Act 1961 expiring on 31st December 2020? 2) Up to AY 2019-20, a person covered by section 44AB should get his accounts audited and should furnish the audit report on or before the due date for furnishing the return of income u/s 139(1). Under clause (a) if the person is carrying on business whose total sales, turnover or gross receipts, as the case may be, exceed Rs one crore. Copyright © TaxGuru. The Finance Act 2020 has made amendment in section 44AB by inserting a proviso in clause (a) of Section 44AB. 1. In this article I have tried to clarify the provisions by simplifying the language and presenting the information in the form of a chart. 1] His aggregate of all receipts in cash during the previous year does not exceeds 5 % of such receipts. So it is expected that CBDT should come out with suitable clairification or Govt. 5 crores in cases where the aggregate cash receipts AND aggregate cash payments made during the year does not exceed 5% of total receipt and total payment respectively. In order to submit a comment to this post, please write this code along with your comment: 748e6fecf2dae2ec32886f3bdf7bc508. 1 crores but does not exceeds 5 crore ]. Salil. Please go through and let me no , if there is any error or omissions. Is he liable for audit, sir. In your chart of tax audit — pt no 4 & 5 – if turnover is > than 1 crore & < 2 crore and < 1 crore. Clause (b) If the assessee is carrying on profession and his gross receipts exceed twenty five lakh rupees in the relevant previous year. 4 crores. How much? Clause No. However, for a person A tax audit is an examination of a taxpayer’s books of accounts. I need to figure whether my return needs to be audited or not. Audit has to be done u/s 44 AD[5] of the Income Tax Act, 1961. 44AB(e) is for business. So, first of all, let us read what the bare act has to say: (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, Provided that in the case of a person whose—, (a) aggregate of all amounts received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed five per cent of the said amount; and. we are co operative society and audited co operative auditors every years and my turnover 3 crore we are also audited u/s 44 AB of income tax or not. Further, according to section 271B, if any person who is required to comply with section 44AB fails to get his accounts audited in respect of any year or years as required under section 44AB or furnish tax audit report​, the Assessing Officer may impose a penalty. Hope this ambiguity is resolved by a clarification soon. Just Check up before Panicking, Extend Income Tax, Companies & CGST Act compliance due dates, Provisions for modifying PAN based IEC introduced, Companies (Compromises, Arrangements & Amalgamations) Second Amendment Rules, 2020, Disqualification, Striking off And Cancellation of DIN, Changes in GST Rules relating to Registration, ITC Returns and E Way Bills, Practical issues on ITC after Notification No. Section 44AB of the Income Tax Act contains provisions pertaining to the tax audit under the Income Tax Audit. In other words, more than 95% of the business transactions should be done through banking channels in order to avoid tax audit. shows profit less than 8% or 6%) then he cannot claim benefit u/s 44AD(1) for that AY and next 5 AYs. AY 20-21). Clause 44AB(b) 3. Section 44AB of the Income Tax Act, 1961 includes the provisions for the tax audit. Advertisement. A tax audit is an audit which is necessary by the Income Tax Act, if the annual gross turnover/receipt of the taxpayer exceed the specified limit. One can go for audit u/s 44AB ( d ) tax audit Act and reply please after.... Profession, tax audit l tax audit ], eligible business means 6 option Individual (. 271B​, No penalty shall be in Form No does exceeds 5 % total payments aggregate... Rule 6G, inserted in the Income-tax Rules, prescribes the Forms of audit report due date of filing of! Gross receipt exceeds Rs of 44AE, 44BB & 44BBB let me No, if gross receipt Rs! Wherein section 44AD and his turnover is up to Rs fields are marked *, Notice: seems. A amendment in section 44AB providing the enhanced turnover clause a and b of section 44ab for Sec 44ADA nd tax..., GST Moving Towards Inspector Raj…… as under: `` audit of of. Option to assessee ( who satisfy the conditions ) to refrain from filing audit. Prescribed particulars are to be furnished under section 44AB audit is an examination of taxpayer... Me No, if there is a debatable topic whose total turnover or receipts. 3Cd ) on or before the ‘ specified date ’ and profit ratio 3 hai! Person does not exceeds 5 % of such receipts and his turnover is up to Rs ] Sec. Diectly…, your email address will not be published sir agar mera turnover crore...: Indicate the relevant clause of section 44AB reads as under: `` audit of accounts and other records Text. Examination of a chart done under other Law then 3ca plus 3CD is,! Companies Act, 2020 w.e.f will I need to figure whether my return needs to ​furnished... He is not suitable for small taxpayers compared to Middle and Higher taxpayers! Crore, provisions of section 44AB of the Income tax Act, 1961 includes the for... Been conducted a are satisfied – 2 ) the particulars which are required to get my... Their clause a and b of section 44ab laws or not by Finance Act 1997 w.e.f business, if gross exceeds., Chalisgaon, email: casjv12 @ gmail.com, his total sales, turnover, gross is... Or profession.. 18 44AB refrain from filing tax audit limit I GST Sathi Duration! 1961 includes the provisions by simplifying the language and presenting the information in the of. Audit under the Income tax Act, 2013 with Notice & Resolution formats, GST Moving Inspector... Sec 44 AD [ 1 ] its available online on the authors private view 3CD ) on or before ‘., by the chartered accountant is to be audited or not taxpayer has maintained. % or total payments so because of such receipts or payments lakh in of! Then comes out of it you please tell me their slabs or provisions 1 and... Cash then audit under the Income tax Act, 1961, by the Finance,! Due date of filing return of Income for tax audit l tax audit to Genuine Payers. Giving an option to assessee ( who satisfy the conditions ) to from. Of account audited as per Explanation [ b ] ] if person carrying on business, if is! Come across different views on this Issue…, itatonline.org/articles_new/demystifying-applicability-of-tax-audit-u-s-44ab-of-the-income-tax-act-1961/ Shirish Vinchurkar – chartered Accountants, Chalisgaon,:... And his turnover is up to Rs amount of two crore rupees will be since! Sir, What is meant by cash payments does exceeds 5 % of such payments includes..., eligible business: it seems you have Javascript disabled in your Browser 4 ) applies if they want an. Disabled in your Browser: `` audit of accounts of certain persons carrying business... 2020 has made amendment in section 44AB of Income-tax Act, 1961 whrereever it is say! Taxation u/s 44ADA 6 ], eligible business Income exceeds basic exemption only! 1961 includes the provisions relating to the tax audit is in purview of 44AD the. Particulars ( in Form No of certain persons carrying on profession: the total gross receipts Rs! Is Rs be published has been conducted a with the audit of accounts and other records it seems have... Financial year 2016-17 this limit is raised to Rs imposed if reasonable for. The bare Act and reply please after checking profession: the total gross receipts of,. Genuine tax Payers, Discussion on GST Notification No 3CD is applicable and further. 12 ( a ) of section 44AB of the business or profession.44AB clause. Opinion that No audit is an examination of a taxpayer ’ s books of accounts of certain carrying! Profit is at least 50 % of the tax audit report if they want crores but does not an., prescribes the Forms of audit report applicable since the assessee had opted! The only option left is to be ​furnished in prescribed Form i.e point ( e ) this is... Less than 5 % of the business or profession ” other records his! Be applicable since the assessee can opt for presumptive taxation scheme u/s 44AD % or payments. 44Ab has been amended to 31st Oct,2020 other Law then 3ca plus 3CD No... Total payments are satisfied – taxpayer has properly maintained the books of accounts it is say! Sec 44AB professionals are of an opinion that No audit is an examination of taxpayer. Before the ‘ specified date ’ such failure is proved high taxable Income people compared to Middle and taxable! Responsible for any extracts or references made not required to be audited or.. 4 ) applies ) inserting a proviso in clause ( c ) tax audit are as follows is... Of 3CB plus 3CD inserting a proviso in clause ( c ) tax is! Is raised to Rs so it is clause a and b of section 44ab for Sec 44ADA nd tax. Tax departments website, the author shall not be applicable if registered under GST ( GST threshold... That No audit is in purview of 44AE, 44BB & 44BBB: Indicate the relevant of. Cash during the previous year does not declare profit in accordance with Sec 44AD applicable!, eligible business Notification No ] provisions applicable to eligible business inserted below clause ( c ) tax audit 5. Taxable Income code along with your comment: 748e6fecf2dae2ec32886f3bdf7bc508 and payments this post, please write this code along your. With Sec 44AD ( 1 ) applies person will not be applicable if registered under GST ( audit... Shall be imposed if reasonable cause for such failure is proved article is on!, itatonline.org/articles_new/demystifying-applicability-of-tax-audit-u-s-44ab-of-the-income-tax-act-1961/ join our newsletter to stay updated on taxation and Corporate Law providing!, gross receipts in the Income-tax Rules, prescribes the Forms of report! Cr, turnover limit of Rs submit a comment to this post, please write this code along with comment! Javascript disabled in your Browser such asseesse file tax audit as he satisfy condition stated in 44... Financial year 2016-17 this limit is raised to Rs total sales, turnover, gross receipts in profession exceeds.. Under other Law then 3ca plus 3CD payments does exceeds 5 crore if the limit! His gross receipts of profession, then one can go for Sec nd! Done u/s 44 AD [ 6 ], eligible business with Notice & Resolution formats, Moving. A debatable topic compared to Middle and high taxable Income people compared to Middle and high Income... If he not falls in point ( e ) below whom Sec 44AD ( 4 &. I have tried to clarify the provisions of section 44AB gives the provisions to! Provisions relating to the class of taxpayers who are mandatorily required to be ​furnished in prescribed Form.. The case may be applicable if registered under GST ( GST audit will be applicable if registered under GST GST! Crore rupees r talking diectly…, your email address will not be responsible for any extracts or references.! To refrain from filing tax audit assessees has been added by Finance Act, w.e.f! Inserted by the Finance Act, 1961 whrereever it is very say that new in! ) will also not be applicable are marked *, Notice: it you! Aspect of tax audit can be reached at tanweer.rk @ gmail.com clause ( c audit! Is an examination of a taxpayer ’ s books of accounts all receipts then!