What is a Tax Audit?
A tax audit is an examination of the books of accounts moved to verify that the Income Tax Act's requirements are being met. The Companies Act already requires that an audit be performed in the case of corporates. As a result, only businesses exempt from audit requirements under the statute regulating their particular type of business organization are subject to the need for a tax audit.
For instance, under the Partnership Act, partnerships are not obligated to audit their books of accounts.
The income tax an assessee must pay is often calculated based on their self-assessment.
However, the Act stipulates that the computation of the assessee's income tax liability must be accompanied by proof in certain situations, such as when the turnover level is exceeded. Assesses must submit their books of accounts for an income tax audit to prove their case to the Income Tax Department.
What is the Scope of Tax Audit?
The scope of a tax audit includes a chartered accountant's study or review of the financial records of any business or profession kept by taxpayers (CA). An income tax perspective is used when doing the tax audit. The aim of the tax audit is to determine whether the income tax due is calculated correctly and under Income Tax Act regulations. The Income Tax Department can have faith in the assessee's data in the income return on seeing the tax audit certification from a CA.
What is the Process of Submitting a Tax Audit?
Here is all you need to know about submitting a tax audit report:
- The CA assigned to conduct a tax audit of a business or individual must present the tax audit report online along with his legitimate login information.
- The taxpayer must also provide pertinent information about their CA in their login platform.
- The taxpayer must approve or reject the report on their login platform after the tax auditor has uploaded it. In case of rejection of the report, the overall procedure should be repeated until the report gets approved by the taxpayers.
- The tax audit report needs to be submitted on or before the predefined deadline for submitting an Income Tax Return, which is September 30 for regular taxpayers and November 30 for taxpayers participating in international transactions.
What are the Requirements for Tax Audit Filing?
You must provide the required paperwork to finish the Income tax audit. The following are the four that are most frequently needed.
Form 3CA:
This is for businesses or individuals that must legally conduct a tax audit.
Form 3CB:
This is for a business that is not required to undergo a tax audit by any other law.
Form 3CD:
This form is easier to view a thorough summary of specifics. It includes various information on the company and its dealings.
Form 3CE:
NRIs and foreign businesses should use this form. If you get payments or royalties from an Indian company or the government in place of providing technical services, you must submit it.
To keep tax auditors informed of the most recent modifications to the tax audit report requirements, the Direct Taxes Committee of the ICAI routinely publishes guidance notes on tax audits. This could be concerning alterations to forms, such as Form 3CD in 2018, changes to the information that must be given, the role of the auditor(s), or both.
E-submission of Tax Audit Report
The CA should submit the tax audit report online using the appropriate login information after auditing the assessee's books. The taxpayer should also add the CA details on the assessee's login page. The assessee must accept the tax audit report on the taxpayer's login site after the tax auditor submits it. If the report is not approved within the allotted time frame Or is rejected, the auditor should start the report filing process from scratch.
Due Date for Report Submission
All taxpayers must submit the tax audit report by the deadline, if not earlier. If the assessee has engaged in an international transaction, the deadline is 30 November; otherwise, it is 30 September.
Penalty when tax audit is delayed
If the taxpayer wants his tax audit done, but it is not complete, the following penalties can be imposed on him:
- 0.5 per cent of total sales, revenue, or gross income
- One million, five hundred dollars
How Lawgical India can help in filing your tax Audit?
A tax audit is an analysis of the books of accounts carried out to verify whether the Income Tax Act's requirements are met or not. Therefore, Lawgicalindia is here to help you if you're looking for a company to aid you with your tax audit. Lawgicalindia is a brand name that stands for commitment, honesty, confidentiality, and trust. The primary needs of a business are online legal services in India, and we are the leading supplier of these services.
We are here to assist you with all your issues.
