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Income Tax Audit – Ensuring Compliance & Accuracy
An Income Tax Audit ensures that taxpayers maintain accurate books of accounts and financial records, truly reflecting their income. Section 44AB of the Income Tax Act, 1961, mandates tax audits for businesses and professionals exceeding specified turnover or income thresholds.
Applicability of Income Tax Audit (Section 44AB)
For Businesses:
Not Opting for the Presumptive Taxation Scheme (44AD):
- If total sales, turnover, or gross receipts exceed ₹1 crore in a financial year.
- If cash transactions (receipts and payments) are up to 5% of total gross receipts, the tax audit threshold increases to ₹10 crore.
Opting for the Presumptive Taxation Scheme (44AD):
- If total sales, turnover, or gross receipts exceed ₹2 crore in a financial year.
- If cash receipts do not exceed 5% of total turnover, the tax audit threshold increases to ₹3 crore.
- If the business claims profit lower than 8% of turnover (or 6% for digital transactions).
For Professionals:
Compulsory Audit If:
- Gross receipts exceed ₹50 lakh in a financial year.
- Profit is lower than 50% of total receipts and exceeds the basic exemption limit.
Audit Report & Filing:
- The audit report must be filed using Form 3CA/3CB and 3CD by 30th September of the assessment year.
Penalty for Non-Compliance (Section 271B):
- The lower of 0.5% of total sales, turnover, or gross receipts ₹1,50,000.
Why Choose Panchal S K and Associates?
- Expertise in Income Tax Compliance – Our team of seasoned Chartered Accountants ensures that your tax audit complies with Section 44AB of the Income Tax Act, 1961, minimizing risks and ensuring accuracy.
- Comprehensive Audit & Reporting – We meticulously review books of accounts, financial statements, and tax computations, ensuring precise reporting in Form 3CA/3CB and 3CD within the stipulated timelines.
- Penalty & Risk Mitigation – Our structured audit approach ensures that your business stays compliant, avoiding penalties under Section 271B and other tax-related legal repercussions.
- Industry-Specific Tax Planning – We tailor our audit strategies to match your business type, size, and industry, providing valuable insights that go beyond compliance.
- Advanced Audit Methodologies – Leveraging technology-driven audit techniques, we ensure accuracy in turnover calculations, profit declarations, and presumptive taxation applicability for businesses and professionals.
- End-to-End Tax Advisory & Support – From understanding tax laws, optimizing deductions, and ensuring audit readiness to timely filing and strategic tax planning, we offer complete assistance.
With Panchal S K & Associates, you gain more than just a tax audit—you secure a trusted financial partner committed to your business’s growth and compliance.