5
THINGS YOU MUST KNOW ABOUT TAX AUDIT
1.
As per the provisions of section 44AB of the Income
Tax Act, 1961, every person carrying a business whose turnover exceeds Rs. 1
Crore or carrying a profession whose receipts exceeds Rs. 25 Lacs in the
financial year 2012-13, must get his accounts audited before filing Income Tax
Return.
2.
Penalty for non compliance of the same is Rs.
1,50,000 or one-half % of the total turnover or receipts, as the case may be.
3.
A trust/association/institution/NGO carrying
on business may enjoy exemptions as the case may be under sections 10(21),
10(23A), 10(23B) or section 10(23BB) or section 10(23C) or section 11. A
cooperative society carrying on business may enjoy deduction under section 80P.
Such institutions/associations of persons are also required to get their
accounts audited and to furnish such audit report for purposes of section 44AB
if their turnover in business exceeds Rs.1 Crore.
4.
Section 44AB does not make any distinction
between a resident or non-resident. Therefore, a non-resident assessee is also
required to get his accounts audited and to furnish such report under section
44AB if his turnover/sales/gross receipts exceeds Rs. 1 Crore or Rs. 25 Lacs,
as the case may be. This audit, however, would be confined only to the Indian
operations carried out by the non-resident assessee since he is chargeable to
income-tax in India only in respect of income accruing or arising or received
in India.
5.
The following have been listed out as
professions in section 44AA and notified there under (Notifications No.
SO-17(E) dated 12.1.77, No. SO 2675 dated 25.9.1992 and No. SO 385(E), dated
4.5.2001):
(i) Accountancy
(ii) Architectural
(iii) Authorised Representative
(iv) Company Secretary
(v) Engineering
(vi) Film Artists/Actors, Cameraman, Director, Singer,
Story-writer, etc.
(vii) Interior Decoration
(viii) Legal
(ix) Medical
(x) Technical Consultancy
(xi) Information Technology
The following activities
have been held to be business :
(i) Advertising agent
(ii) Clearing, forwarding and shipping agents
(iii) Couriers
(iv) Insurance agent
(v) Nursing home
(vi) Stock and share broking and dealing in shares and
securities
(vii) Travel agent.