{"id":5835,"date":"2023-11-28T11:04:21","date_gmt":"2023-11-28T05:34:21","guid":{"rendered":"https:\/\/simplemyfiling.com\/?p=5835"},"modified":"2023-11-28T11:06:54","modified_gmt":"2023-11-28T05:36:54","slug":"section-44ab-of-income-tax-act-tax-audit","status":"publish","type":"post","link":"https:\/\/simplemyfiling.com\/index.php\/2023\/11\/28\/section-44ab-of-income-tax-act-tax-audit\/","title":{"rendered":"SECTION 44AB OF INCOME TAX ACT \u2013 TAX AUDIT"},"content":{"rendered":"\t\t
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SECTION 44AB OF<\/span> INCOME TAX ACT \u2013 TAX AUDIT<\/span><\/h2>\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Understanding Tax Audit under Section 44AB of the Income Tax Act<\/strong><\/p>\n

    A ‘tax audit’ is a process designed to verify the accuracy of a taxpayer’s books of accounts, ensuring proper maintenance of records, and correct computation of income. This practice acts as a deterrent against fraudulent activities. Section 44AB of the Income Tax Act mandates a tax audit when a taxpayer crosses specific thresholds or meets certain criteria, requiring the services of a Chartered Accountant.<\/p>\n

    Applicability of Tax Audit under Section 44AB<\/strong><\/p>\n

    The following table summarizes the applicability criteria for tax audit under Section 44AB:<\/p>\n\n\n\n\n\n\n\n\n\n
    Business\/Profession<\/th>\nSection 44AB Applicability Criteria<\/th>\n<\/tr>\n<\/thead>\n
    Business<\/td>\nTotal sales, turnover, or gross receipts exceed INR 1 Crore in any previous year. Total sales, turnover, or gross receipts exceed INR 10 Crore, and specific conditions related to cash transactions are met.<\/td>\n<\/tr>\n
    Business covered under section 44AE\/44BB\/44BBB<\/td>\nTaxpayer eligible for presumptive taxation under these sections but declares profits lower than deemed profits.<\/td>\n<\/tr>\n
    Business covered under section 44AD(4)<\/td>\nIncome exceeds the maximum amount not chargeable to tax in any previous year.<\/td>\n<\/tr>\n
    Profession<\/td>\nGross receipts in a profession exceed INR 50 Lakhs in any previous year.<\/td>\n<\/tr>\n
    Profession covered under section 44ADA<\/td>\nTaxpayer opts for presumptive taxation but declares profits lower than deemed profits, and income exceeds the maximum amount not chargeable to tax.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Non-Applicability of Section 44AB<\/strong><\/p>\n

    Tax audit provisions under Section 44AB do not apply under the following circumstances:<\/p>\n

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    1. Taxpayer opting for presumptive taxation under Section 44AD(1) with total sales\/turnover\/gross receipts below INR 2 Crores.<\/li>\n
    2. Taxpayer deriving income under Section 44B or Section 44BBA.<\/li>\n
    3. Taxpayer required to get accounts audited under any other law, provided certain conditions are met.<\/li>\n<\/ol>\n

      Audit Report Forms under Section 44AB<\/strong><\/p>\n

      As per rule 6G of the Income Tax Rules, the audit report and particulars required under Section 44AB are furnished in the following forms:<\/p>\n