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.
FAQs on Income Tax Audit
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.