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Business income tax return with tax audit

A business tax return is basically an income tax return. The return is a statement of income and expenditure of the business. Also, any tax to be paid on the profits made by you is declared in this return. The return also contains details of the assets and liabilities held by the business.

  • Every taxpayer whose turnover is above Rs. 1 Crore in case of businesses and Rs. 50 Lakh in case of professionals is required to get a tax audit done.
  • A tax audit is necessary even when the profits declared by you is less than 8% (6% on Digital transactions) of the turnover in case of business and 50% of receipts in case of professionals.

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Who should get a Tax Audit Done?

Everything related to the income tax audit is given in Section 44 AD of the Income Tax Act, 1961. The section 44 AB dictates the eligibility for the tax audit. This sections basically dictates that the following categories of taxpayers need to get a tax audit report.

Businesses:

Businesses operating in the country have to obtain an audit report once their total sales turnover or gross receipts in the business activities start crossing the ₹ 1 crore mark in any previous years. The income tax labels a ‘business’ as an economic activity that is being carried with the objective of earning profits.

Professionals:

Professionals whos gross annual receipts extend over ₹ 50 lakh in total, in any of the previous years, they need to get tax audit performed on their business activities. The Section 6F of the Income Tax Rules, 1962 specifies who all fall under the category of professionals who might need a tax audit.

  • Architects
  • Accountants
  • Authorized Representatives
  • Engineer

Taxpayers Under Presumptive Taxation Scheme

Every company has to appoint an auditor with the first month of the company’s registration. The following persons/entities cannot be appointed as the auditor of the company:

Taxpayers who claim that their earnings/ profits are lower than the threshold limit compliant with the presumptive scheme will also need to acquire a tax audit report.

Tax Audit Due Date

  • The section 44 AB of the income tax act specifies that the final date for the tax audit is 30th of September of the Assessment Year.
  • This means that if a taxpayer has to obtain the tax audit report they have to do the ITR filing on or before 30th September with the tax audit report.
  • In addition to this, if the taxpayer is also due for a transfer pricing audit then the due date for the income tax audit becomes 30th Septmeber of the Assessment Year.

Process to apply ITR with audit

Tax Audit Forms

In order to procure the tax audit report, a particular taxpayer has to furnish information about his business in the forms specified by the Income Tax Department.

The forms for tax audit report are namely:

  • Form 3CA
  • Form 3 CB

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