Special Offer For Practicing Chartered Accountant
Special Offer For Practicing Chartered Accountant
Various types of audits are mandated under various laws. For example, under Section 44AB, certain taxpayers whose turnover or gross receipts exceed Rs. 1 crore in a financial year, must get account audits. Meanwhile, cost audits are compulsory under cost accounting laws, company audits are required under company laws, etc. The Chartered Accountant carrying out an audit must e-file tax reports via Form 3CA or 3CB.
Here in this article, we will deep dive into Tax audit and e-filing tax audit reports, applicability, various applicable forms and more.
A Tax audit is the process of examining and verifying the financial records, transactions, and statements of a taxpayer to ensure that they comply with Income tax laws and regulations. It is typically conducted by a Chartered Accountant (CA) with a valid certificate of practice, as mandated under the Income Tax Act, 1961.
A tax audit is conducted to ensure that taxpayers are accurately reporting their income, deductions, and tax liability. It helps in verifying whether the financial statements are prepared according to the prescribed accounting standards and tax laws.
Under Section 44AB of the Income-tax Act, 1961, individuals or entities in specified categories are required to have their accounts audited by a practicing Chartered Accountant (CA). The tax audit report is submitted electronically in Form 3CA or 3CB along with Form 3CD. After the Chartered Accountant submits the report, the taxpayer must approve it through ITD portal (Income Tax Login).
If a person is involved in a profession or business, and required by any law, including the Companies Act, to have their books of accounts audited. In such cases, the report is submitted via Form 3CA. For those not mandated by these laws, the report is submitted using Form 3CB, with Form 3CD being mandatory in both cases.
A tax audit is applicable for the following:
| Category | Threshold for Tax Audit Applicability |
| Businesses | Total sales, gross receipts, or turnover exceeding Rs. 10 crore, provided:
|
| Professionals | Gross receipts exceeding Rs. 50 lakh in the preceding financial year.
|
These two types of forms in which a tax audit e-filing report has to be submitted are - 1) Form 3CA/ 3CD and 2) Form 3CB/CD. In this, only one will be applicable to a taxpayer.
A taxpayer either being a professional or business owner is required to get their books of accounts audited under any law. In such a case, the assessee must submit his tax audit report via Form 3CA and Form 3CD.
When an assessee either being a professional or business owner is not required to get their books of account audited under any laws. Then in such a case, the assessee must submit their tax audit report through a Form 3CB and a Form 3CD.
Under Section 44AB, taxpayers either engaged in business or profession requiring an audit must provide relevant particulars for income-tax assessment using Form 3CD. Any type of assessee either furnishing Form 3CA or Form 3CB is mandated to furnish the details of relevant particulars in Form 3CD.
It consists of 44 heads and captures various information about the taxpayer.It is primarily to highlight the need for a thorough examination of accounts, records, and documents by the tax auditor to provide comprehensive information.
The tax audit report under Section 44AB must be submitted electronically to the Income Tax Department by the due date, which is:
| Category of Taxpayer | Due Date for Filing Tax Audit Report |
| Regular taxpayers (businesses and professionals) | September 30 of the relevant assessment year |
| Taxpayers involved in international/specified transactions | October 31 of the relevant assessment year (along with Form 3CEB) |
| Late submission consequences | Penalties may apply under Section 271B |
Here are some of the steps to give a brief overview of the entire audit e-filing process:
Step 1: Taxpayers are required to appoint a CA to file the audit report. Both the taxpayer and CA must already be registered on the income tax e-filing portal.
Step 2: The Chartered Accountant conducting the e-filing of a tax audit report is required to upload the report using their official login credentials.
Step 3: The taxpayer must provide relevant details about their CA through their own login portal.
Step 4: Post submission of the audit report, the taxpayer needs to either accept or reject it using their login portal. If rejected, the entire process must be repeated until the same is again accepted.
A tax audit under Section 44AB of the Income-tax Act, 1961 is compulsory for businesses and professionals who meet specific turnover or gross receipt criteria. The tax audit ensures that taxpayers maintain proper financial records and comply with tax regulations.
The tax audit report, prepared by a Chartered Accountant, must be submitted electronically to the Income-tax Department using Form 3CA/3CB and Form 3CD. This process helps streamline compliance, avoid errors, and ensures that taxpayers meet the legal requirements effectively.
Utilizing tax audit software like EasyOFFICE can further automate and simplify the e-filing process, ensuring accuracy and ease in meeting audit obligations. EasyOffice is a complete taxation solution that automates audit e-filing, income tax filing, GST return filing, and more. Ensure the accuracy of the data provided to avoid any issues during e-filing.
Who can submit my tax audit and e-filing report?
Only a practicing Chartered Accountant (CA) can conduct and submit the tax audit report. The CA must be registered on the e-filing website.
Is it compulsory for CAs to submit a UDIN on the e-filing portal for the tax audit report?
Yes, the auditor must generate a unique UDIN (Unique Document Identification Number) and update it on the e-filing portal within 60 days from the submission date. Failure to do so will result in an invalid submission.
What are the penalty charges for not complying with the audit report requirements?
If a taxpayer does not get their accounts audited or does not furnish the tax audit report, penalties can be imposed under Section 271B, maximum of Rs. 1.5 lakh.
If an assessee is mandated for an audit under any other law, is it necessary to conduct a tax audit under the IT Act?
Yes, if an assessee is audited under another law, a tax audit under the Income-tax Act is still mandatory if applicable. The tax audit report must be filed using Form 3CA and Form 3CD.
Is it possible to revise a tax audit and e-filing report?
Yes, revisions can be made to a previously filed tax audit report, but the auditor must provide a valid reason. Revisions may be due to changes in financial data, legal amendments, or technical modifications.
Can a tax audit be avoided by opting for the presumptive taxation scheme? Yes, under Section 44AD and Section 44ADA, businesses and professionals can opt for the presumptive taxation scheme to avoid a tax audit if their income is declared as per the prescribed presumptive rates and they meet the scheme’s eligibility criteria.
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