1 crores but does not exceeds 5 crore ]. 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. 1. Is it really so? [Under section 44AB] In this article, we will cover every aspect of tax audit as per income tax act. In this scenario, person will not require to audit as he satisfy condition stated in  Sec 44 AD [1]. 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. 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. Section 44AB of Income Tax Act. Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. Clause (c) of section 44AB, inserted by the Finance Act 1997 w.e.f. Sir agar mera turnover 1.26 crore hai and Profit ratio 3% hai and all receipts cash then audit under which section. Clause 8: Indicate the Relevant Clause of section 44AB under which the audit has been conducted: Verify the applicability of clauses of sec. 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. So unfair in both amended for low taxable income people compared to middle and high taxable income. 3CD) on or before the ‘specified date’. 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. The Section 44AB of the Income Tax Act enjoins provisions regarding tax audit under IT Audit. c) Tax audit is in purview of 44AE, 44BB & 44BBB . Can you please tell me their slabs or provisions 1. 44AB. Section 44AB. These amendments of 44AB is applicable from A.Y. 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 30th September of the relevant assessment year. 17 [Audit of accounts of certain persons carrying on business or profession.. 18 44AB. Plz read the bare act again. Section 44AB of the Income Tax Act contains provisions pertaining to the tax audit under the Income Tax Audit. 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. In such situation, there are two more situation may arise –. 1. The examination is conducted to ensure that the taxpayer has properly maintained the books of accounts and other records. Tax Audit l Section 44AB of Income Tax Act,1961 l New Tax Audit l Tax audit limit I GST Sathi - Duration: 8:43. 3CB and the prescribed particulars are to be reported in Form No. (b) aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed five per cent of the said payment, this clause shall have effect as if for the words “one crore rupees”, the words “five crore rupees” had been substituted; or, (b) carrying on profession shall, if his gross receipts in profession exceed fifty lakh rupees in any previous year; or, (c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AE or section 44BB or section 44BBB, as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year; or, (d) carrying on the profession shall, if the profits and gains from the profession are deemed to be the profits and gains of such person under section 44ADA and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his profession and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year; or. (Read Sec 44AD(4) & 44AD(5)). 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? Form No. 5 crores for the tax audit is inserted below clause (a) to section 44AB. Salil (Querist ... 2. 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. persons to whom Sec 44AD(1) applies). In Present, if an assessee claims that his profits and gains from ‘eligible business’ are less than 8% or 6% or 50% of the total turnover or gross receipts [as the case may be as per Section 44AD and 44ADA] and whose total income exceeds the maximum amount not chargeable to tax, the assessee shall maintain the books of account as prescribed under Section 44AA of the IT Act [as per u/s 44AA(iv) or Section 44ADA(4) as the case may be] and get them audited under section 44AB … I always believe that any analysis should begin by reading the bare act. Section 44AB. Section 44AB has been introduced in the Income-tax Act, 1961, by the Finance Act, 1984. The author shall not be responsible for any extracts or references made. b) In case of profession, if gross receipt exceeds Rs. This was accompanied by a amendment in Explanation to Sec 44AB. Copyright © TaxGuru. The provisions of Section 44AB have been amended by the Finance Act, 2020 giving rise to major confusion in the minds of businessmen and professionals alike. Join our newsletter to stay updated on Taxation and Corporate Law. (b) A person carrying on profession: The total gross receipts exceeds rs. Audit report under section 44AB of the Income-tax Act,1961 in a case where the accounts of the business or profession of a person have been audited under any other law: Download: Form 3CB-3CD: 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: Download: Form 3CEB 3CA or 3CB) and such further prescribed particulars (in Form No. Clause 44AB(b) 3. 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 … 3CA/3CB and ​3CD. 2. 50 lakhs in the previous year. 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. 12(a) and (b) of Form 3CD Para No. 2] Person whose total cash receipts and total cash payments does  exceeds 5 % of such receipts or payments. The only option left is to go for audit u/s 44AB(e) which again is a debatable topic. 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. Section 44AB gives the provisions relating to the class of taxpayers who are mandatorily required to get their accounts audited from a chartered accountant. CLAUSE 8 : Indicate the relevant clause of section 44AB under which the audit has been conducted a. However, w.e.f. A tax audit is an examination of a taxpayer’s books of accounts. Audit will not be applicable since the assessee can go for presumptive taxation scheme u/s 44AD. 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”. These provisions have effect from.AY 2020-21, A pensioner is getting more than 5 lakhs Rupees as salary income and getting 2 lakhs Rupees from profession (with 51% as expenditure). A] If person carrying on business, his total total sales, turnover, gross receipts is Rs. 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. but New Regime is better for net taxable income above 15Lacs. (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. (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. In other words, more than 95% of the business transactions should be done through banking channels in order to avoid tax audit. It just discussion and study purpose. 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. AY 2020-21 this due date of filing return of income for tax audit assessees has been amended to 31st Oct,2020. Salil. 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. 3CA - Audit report under section 44AB of the Income-tax Act, 1961, in a case where the accounts of the … shows profit less than 8% or 6%) then he cannot claim benefit u/s 44AD(1) for that AY and next 5 AYs. 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"? thanks . Penalty for not getting accounts audited under Section 44AB. Clause 44AB(a) 2. 3CD.] The tax audit is carried on to ensure that the payer has a fully maintained book of records and accounts, that properly depict the taxpayer’s income. Difficult to Genuine Tax Payers, Discussion on GST Notification No. 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. If total income exceeds basic exemption limit only then tax audit is applicable. In this article I have tried to clarify the provisions by simplifying the language and presenting the information in the form of a chart. The chartered accountant conducting the tax audit is required to give his findings, observation, etc., in the form of audit report in Form Nos. 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? Maintained the books of account audited as per Income tax Act,1961 l new tax audit is in purview 44AE. The previous year does not declare profit in accordance with Sec 44AD is INR 2.... To refrain from filing tax audit conducted by the chartered accountant have disabled... 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