All about Deductions for rent u/s 80GG of Income Tax Act, 1961
A detailed discussion is carried out about the legal provisions of Section 8GG and all practical issues or steps to be taken so that this deduction can’t be denied.
Under direct taxes, the CBDT has posed onerous responsibility on the auditor via the Income Tax Act 1961 which has various provisions requiring a compulsory Tax audit.The Income Tax Act 1961 states various provisions for public charitable trust, the corporate and non corporate assessee, and others to conduct an Tax audit of accounts for tax purposes.
VJM & Associates LLP is known to deliver quality services to its clients. The professional team helps in developing strategies and an effective management system that enhances the operations and provides great value to the business. We at VJM & Associates LLP firmly believe in Tax Audits being a value addition exercise rather than a mere compliance exercise.
When the annual gross turnover or professional receipt of an assessee exceeds the limit as specified in the Income Tax Act 1961, the Income tax act makes it compulsory to conduct an audit under section 44AB of Income Tax Act, 1961. In common parlance, such audit is referred as “Tax audit”
Income Tax Act 1961 specified requirement of audit under different sections such as:
Different requirements of audit are given under different sections of Income Tax Act, 1961. However, the most common and general audit requirement is given in Section 44AB of Income Tax Act. Requirement to carry out audit is as follows:
* To promote digitalisation of transactions and minimise involvement of cash amount, Finance Act, 2020 amended section 44AB of Income Tax Act with effect from 01.04.2020 to insert that:
Then turnover limit of INR 5 Crore shall apply in place of INR 1 Crores.
Under this scheme, assessee is liable to pay income tax on a deemed % of profit and there is no need to compute actual profit. This scheme is applicable to all the assessee carrying out business and whose gross turnover or receipt for the financial year does not exceed Rs. 2 crores. The other features of this scheme are as under:
This scheme is applicable to all the professionals whose gross income does not exceed Rs. 50 Lakhs for the relevant financial year. The other features of the scheme are as under:
Also if the person is required to get his books of account audited under any other law, then he cannot opt for the presumptive taxation scheme.
Similar to above provisions, different sections have different requirement of Tax Audit.
We, at VJM & Associates LLP believe in offering qualitative services encompassing comprehensive review records along with our recommendations on strengthening internal controls for compliance. Here are the following tasks during the course of tax audit:
Following are the major areas which depict why tax audit is important
It is advisable for the tax auditor to keep the following points in mind while furnishing the audit report:
Every person who carries business and his gross receipts exceed Rs 1 crore in a financial year and while the gross receipt for the person in profession exceeds Rs 50 lakhs, then they have to get their books of account audited by a practicing chartered accountant under section 44AB. However, if the amount received in cash or payment made in cash doesn’t exceed 5% of aggregate receipts and payments respectively then the threshold limit of INR 5 Crore shall apply instead of INR 1 Crore.
Apart, different sections have different requirements of audit under Income Tax Act, 1961 like Section 12A created liability of Audit of Trusts etc.
If gross turnover of the business exceeds Rs 1 crores and gross receipts for profession exceeds 50 lakhs then assessee is liable to get his accounts audited under section 44AB. However, the threshold limit is increased to 5 crores if 95% of the receipts are received in digital mode from FY 2020-21.
The purpose of a tax audit is to assure that the books of accounts are maintained by a person according to the provisions of the Income tax Act as applicable. Also, it is conducted to assist the Income Tax authorities to check the accuracy of the return of income filed by a person
Section 44AB provides for liability of audit when turnover of the assessee exceeds a given threshold irrespective of net profit or loss, Therefore, if gross turnover or receipt exceeds the threshold, assessee is required to get his accounts audited irrespective of profit or loss.
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A detailed discussion is carried out about the legal provisions of Section 8GG and all practical issues or steps to be taken so that this deduction can’t be denied.
The government implemented TDS provisions on the sale/purchase transaction of immovable properties through Section 194-IA to the Income Tax Act, of 1961.
Union budget was presented by Hon’ble Finance Minister on 1st Feb 2022 in Parliament wherein various amendments are proposed under Income Tax Act and few changes are also proposed under Goods and Service Tax Act.
In this article, you will get a detailed analysis of amendments proposed by the Finance Act, 2022 in Income Tax and Goods and Service tax.
the Government has rolled out a new annual information statement expanding the scope of current Form 26-AS with the inclusion of various information categories like interest, mutual fund transactions, insurance, dividends, etc.
The government is making all the efforts to promote electronic transactions by providing various tax incentives and discouraging cash transactions by imposing various penalties or increasing tax compliances for cash transactions.
CBDT has decided to extend the due date of filing of various income tax returns and audit reports for FY 2020-21 (A.Y. 2021-22) vide Circular No. 17/2021 dated 9th September, 2021.
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