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Income Tax Due Date Extended – Income Tax Return and Tax Audit Report to 31st October’18

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Due date for filing Income Tax return (ITR) and Tax Audit Report (TAR) for Financial Year 2017-2018 (Assessment Year 2018-1019) has extended to 31st October 2018 by Central Board of Direct Taxes (CBDT).

Background

According to the provision of Section 44AB of the Income Tax Act, All Person who are covered under the provision of TAX Audit are generally required to file their Income Tax Return (ITR) for every financial year by 30th September of every assessment year.

All Private Limited Company, Public Limited Company, Limited Liability Partnership Firm, Partnership Firm, Proprietorship Firm or any other entity on whom Income Tax Audit is applicable are liable to file their Income Tax Return along with Audit Report on or before extended due date 31st October 2018.

What is tax audit?

There are various Laws in our Country which talk about Audit in their respective field such as Company Audit, Secretarial Audit, GST Audit, Cost Audit, Excise & Custom Audit etc.

Similarly, Tax Audit is governed by Income Tax Act, 1961. Tax Audit is an examination or review of books of accounts of the business or profession of all person on whom Income Tax Audit is applicable.

Object of Income Tax Audit?

Tax Audit has made mandatory for certain class of person to ensure transparency, proper maintenance and correctness of books of accounts. Tax Auditor is obligate to check & examine the records to report discrepancies or observations of financials & to certify the same.

Applicability of Tax Audit?

Following Classes of taxpayers are required to get tax audit done:

Class of person Applicability
Person Carrying on business (not opting for presumptive taxation scheme*) Total sales, turnover or gross receipts exceeds Rs 1 crore in the last Financial Year
Person Carrying on business (opting presumptive taxation scheme under section 44AD*) Total sales, turnover or gross receipts exceeds Rs 2 crore in the last Financial Year
Person Carrying on profession Gross receipts exceeds Rs 50 lakhs in the last Financial Year
Person Carrying on the business eligible for presumptive taxation under Section 44AE*, 44BB* and 44BBB* Claims profits or gains lower than the prescribed limit under respective presumptive taxation scheme in the last Financial Year
Person Carrying on the profession eligible for presumptive taxation under Section 44ADA Claims profits or gains lower than the prescribed limit under presumptive taxation scheme and income exceeds maximum amount not chargeable to tax in the last Financial Year
Person Carrying on the business and is not eligible to claim presumptive taxation under Section 44AD due to opting for presumptive taxation in one tax year and not opting for presumptive tax for any of the the subsequent 5 consecutive years If income exceeds maximum amount not chargeable to tax in subsequent 5 consecutive tax years from the tax year where presumptive taxation is not opted for in the last Financial Year

 

ITR  Due date – for whom Tax audit is applicable

All Private Limited Company, Public Limited Company, Limited Liability Partnership Firm, Partnership Firm, Proprietorship Firm or any other entity on whom Income Tax Audit is applicable & who are covered in any class mentioned in the table above liable to file their Income Tax Return along with Audit Report on or before due date 30th September of every assessment year.

What includes Audit report?

Tax auditor has to furnish his Tax Audit report in a prescribed form which could be either Form 3CA or Form 3CB where:

Form No. 3CA is applicable when a person carrying on business or profession is already mandated to get his accounts audited under any other law.

Form No. 3CB is applicable when a person carrying on business or profession is not required to get his accounts audited under any other law

In case of either of the audit report mentioned above, tax auditor is also required to furnish the prescribed particulars in Form No. 3CD which forms part of audit report.

Penalty of non-compliance

If any Person on whom tax audit is applicable but fails to do so, lower of the following may be levied as penalty:

  • lower of 0.5% of total sales, turnover or gross receipts
  • or Rs. 1,50,000

However, no penalty would be imposed, in case of reasonable cause is shown.

 

We have tried to conclude all the points related to Tax Audit & Income Tax Return filing requirements, in case you need support for Tax Audit report and Income Tax return filing, you can reach to us info@registrationseva.com or post your query here.

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