“Any person carrying on a business must get accounting records audited if turnover exceeds Rs 1 croreand for professionals it is Rs 50 lakhs.”
Turnover Limit for Audit
|Category of Taxpayer|
|Business (Not opting Presumptive Income Scheme u/s 44AD)||1crore|
|Professionals(Not opting Presumptive Income Scheme u/s 44ADA)||50 Lakhs|
|Business opting Presumptive Income scheme u/s 44AD||2 crores|
|Professionals opting Presumptive Income scheme u/s 44ADA||50 lakhs|
As per section 44AB- Every person:
- carrying on the business and his Total Sales exceeds Rs. 1 Crore, or
- carrying on profession and his Gross Receipts exceed Rs. 50 Lakhs, or
- carrying on the business and claims lower profit than the profit and gains deemed under section 44AE or 44BB or 44BBB, or
- carrying on the profession and claims lower profit than the profits and gains deemed under section 44ADA and his income exceeds the maximum amount which is not chargeable to income tax, or
- carrying on the business and if the provision 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.
Get his accounts of such previous year audited by a Chartered Accountant mandatorily before the specified date and furnish the audited report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.
Reporting of Tax Audit:
Form 3CA: Form 3CA is an Audit Report in a format specified by the Income Tax Department of India and used to file the Income Tax returns. The document is applicable when the profession or the business of the Assessee reaches the Audit phase and his books of accounts are required to be audited.
Form 3CB: Used in the filing of Income Tax returns in India. An Auditing Authority on the behalf of the person who owns the profession or business submits the Audit Report with no requirement of getting the account books audited as per any Law other than the Income Tax Act, 1961.
Form 3CD: Form 3CD is a Form in accordance with Rule 6G(2) and Section 44AB of the Indian Income Tax Act, 1961. The Form is a part of the process of filing Income Tax Returns in India and is an Annexure to the Audit Report. Form 3CD contains 41 Clauses. It is required to be attached with Forms 3CA or 3CB, as applicable.