As per the present tax laws of India, professionals with gross receipt of Rs. 25 lakh and business with gross receipt of Rs. 1 Crore are required to undertake statutory tax audit every financial year.
Statutory tax audit means audit prescribed under section 44AB of Income tax act 1961. It has to be conducted by an independent chartered accountant who is in practice to report the state of a company’s finances and accounts to the tax department.
The tax audit report is to be obtained in the prescribed form by September 30 of the following financial year. This means, tax audit report for the financial year 2015-2016 are to be obtained by 30th September 2016.
Also Read: Due dates for filing tax audit report
Non-compliance with the tax audit provisions may attract a penalty of 0.5 percent of turnover or INR1 lakh, whichever is lower.
Let us now understand how to get prepared for statutory tax audit as required under section 44AB.
If statutory tax audit or Section 44AB audit is applicable to you or your business then it’s very important to get a good chartered accountant for the Job as a good CA means half of your job is done.
There are no specific rules regarding the appointment or removal of auditor.
Also Read: Applicability of Section 44AB tax audit
During the financial year, you are required to maintain cash book, bank book, ledgers and other registers for your business or profession. The auditor (chartered accounted appointed by you) has power to examine any books of accounts and finance that he thinks necessary to carry out the audit.
After conducting statutory tax audit under section 44AB, form 3CA/3CB as applicable to the assessee and form 3CD has to be prepared. These forms are to be filed with department on or before 30th September of the assessment year related to the financial year for which tax audit under section 44AB has been conducted.
This means, if section 44AB tax audit is applicable then those companies or individuals or other persons are required to produce their books of accounts to a chartered accountant in practice for audit and then file form 3CA/3CB and 3CD with department on or before 30th September.
Due date of 30th September can be extended by CBDT. If it’s extended then such extended date will be considered as the due date instead of 30th September.
From Assessment year 2013-14 onward, tax audit report has to be filed electronically with department.