30th September is fast approaching - complete your tax audits
As a business owner or an individual, it's essential to understand the significance of tax audit in ensuring compliance with Income Tax Laws and regulations. 30th September 2024 is the last date for filing if Tax Audit reports for the FY 2023-24. In case the taxpayer is required to submit report on transfer pricing in Form 3CE then the due date for tax audit is 31st October 2024.
In this article, we'll delve into the world of tax audit, exploring its objectives, requirements, and consequences of non-compliance.
What is a Tax Audit? A tax audit is a thorough examination of a business or profession's financial records to ensure accurate bookkeeping. According to section 44AB of the Income Tax Act, 1961, a person is required to get its accounts audited if any of the conditions mentioned under the section are fulfilled.
What Constitutes an Audit Report? A tax auditor must furnish a report in a prescribed form, either Form 3CA, Form 3CB, or Form 3CE, depending on the specific circumstances. The report must include prescribed particulars in Form 3CD, which forms part of the audit report.
Income Tax Audit Last DateThe last date for completing income tax audit is September 30, 2024, for FY 2023-24, except for assessees covered by transfer pricing audit, who have until October 31, 2024.
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Get SupportHow and When Tax Audit Reports Shall be Furnished? Tax auditors must furnish the report online using their login details as a Chartered Accountant. Taxpayers must add CA details in their login portal and either accept or reject the report. If rejected, the process must be repeated until the report is accepted.
Last Date for Filing Income Tax Audit Report The last date for filing the income tax audit report is October 31, 2024, for taxpayers with international transactions and September 30, 2024, for other taxpayers.
Objectives of Income-tax Audit The primary objectives of tax audit are:
- Proper maintenance of books of account without fraud activities and certification of the same by an auditor.
- Reporting discrepancies noted by proper examination of the books of accounts.
- Reporting various information such as tax depreciation, compliance with the provision of income tax law, and so on.
- Computation of tax and deductions becomes easy with auditing.
- Verification of information filed in the income tax return regarding income, tax, and deductions by the taxpayer.
Penalty of Non-filing or Delay in Filing Tax Audit Report If a taxpayer fails to get the tax audit done, the least of the following may be levied as a penalty:
- 0.5% of the total sales, turnover, or gross receipts
- Rs 1,50,000
However, if there is a reasonable cause for the failure, no penalty shall be levied under section 271B.
In conclusion, tax audit is a crucial process for ensuring compliance with tax laws and regulations. It's essential to understand the requirements, objectives, and consequences of non-compliance to avoid penalties and ensure accurate bookkeeping and reporting.
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