What is Tax Audit ?

Key provisions of Tax Audit - Limit ,Due-Date and Section 44AB


The purpose of a tax audit is to ensure that all income taxes have been paid and verified by the books. A certified accountant will carry out this verification in order for you know if there are any errors or omissions, which could lead them back into compliance with the law.

The act also gives certain limitations on how much information can be obtained during an examination – these limits vary depending upon who’s being audited but usually include both private/personal matters (such as bank statements) along side public records such as financial reports from companies filed under section 440A Of Income Tax Act .

Limits of Tax Audit

The limits of tax audit are not to be taken lightly. The government can demand any document they want, and if you don’t have it on hand they will take your wages until the debt is paid off or jail time served!


A business is any economic activity carried on for earning profits. This includes trade, commerce and manufacturing as well as adventure or concern in the nature of these industries but it does not include profession which involves work done primarily outside an office environment like doctors who treat patients outdoors under rough conditions while lawyers might practice law from their homes because they cannot meet all expenses associated with running a full time office In case you have exceeded 1 Crore turnover/gross receipts during previous year then there would be tax audit


The government is looking into new ways to tax professionals who make more than 50 lakh rupees. A profession or professional could be any one of the following: architect, accountant authorization representative engineer film artist – actor/cameraman director music composer editor etc . The requirements for an individual’s income before they’re considered “professional” varies based on what type it will affect ( Rule 6F).

  1. Architect
  2. Accountant
  3. Authorized representative
  4. Engineer
  5. Film Artist – Actor, Cameraman, Director, Music Director, Editor, and so on
  6. Interior Decorator
  7. Legal Professional – Advocate or Lawyer
  8. Medical Professional – Doctor, Physiotherapist, or Nursing and Paramedical Staff
  9. Technical Consultant
Presumptive Taxation Scheme  

The government wants to ensure that only wealthy people are enrolled in this scheme. If you have sales or turnover over 2 Crore rupees, then there will be an audit from tax authorities and if your company claims its profits come lower than what’s calculated using section 44AD formula – they’ll require a report proving why it is so!

Due Date for Filing Tax Audit Report

Tax audit is a vital part of the taxation process in any country. It assesses the correctness of the income tax return filed by an assessee and determines if there are any discrepancies in it. Typically, when a taxpayer is required to obtain a tax audit, then he would be required to file his income tax return on or before 30th September along with the tax audit report. In case he was also liable for transfer pricing audit, then he would have had to file his tax audit report on or before 30th November of that year. The Income Tax Act under section 44AB prescribes this due date.

The forms (3CA) and (3CD) that you'll need for your tax audit are as follows.

Taxpayers who are required to get a tax audit would be asked by the government for information like their social security number, address and other details that could help in processing their returns. The three main forms include:

1) Audit Form (3CA), which is used during an investigation into possible illegal activity;

2) Statement of Relevant Particulars( 3CD ) -this contains all necessary Financial Intelligence “/Finance” elements such as fingerprints etc.;and finally there’s

The limit on the number of tax audits that a Chartered Accountant can file

A tax audit is conducted by a Chartered Accountant or firm of chartered accountants. The signatory must provide his/her membership number while registering in the e-filing portal, and if it’s done by an accounting firm with more than one person registered as being able to perform audits then all party members will be named on report templates submitted into IRAS (Income Tax Return Submission) website where they can either manually enter data themselves from within their own system once logged onto easily recognizable links sent out at least 10 days prior so affected taxpayers have enough time for reading through these messages closely before submitting any returns(s).  There are limits though: Only thirty-two reports per practitioner annually under Section 141 AA Rules Of Professional Conduct

Penalty for Completing Tax Audit

.The responsibility to appoint tax auditors in an organization is vested with the board of directors. They may also delegate this duty, as it can be done by any officer like CEO or CFO if they have been appointed so by law. Auditing firms and proprietorships will sometimes allow for two joint auditors instead; these would then sign off on each others’ reports together when there are differing opinions among them all–though only after expressing their own opinion first before signing anything

The tax auditor must secure an appointment letter

A letter of appointment must be obtained from the concerned assessee before going forward with their tax audit. The person who signs this return on behalf of an individual or company will seal it wisely, and mention any remuneration offered for doing so in order to ensure confidentiality between both parties involved during such proceedings The auditor’s predecessor can communicate directly via these appointed letters which serve as guidelines when discussing sensitive matters like financials results etc., therefore making sure there is no confusion about what has already been completed regarding our work load

Who cannot be tax auditor?

Members in part-time practice are not eligible to perform tax audits.

  •  A chartered account cannot audit the accounts of a person he is indebted for more than Rs. 10,000.”
  •  The fee for a statutory audit of any company which has an annual turnover greater than 50 crores is very high. It’s against ethics to accept work with these types of organizations if you receive more money in total from them, even though it may only come out as your salary or commission rate
  •  The assessee’s books should be compiled by a Chartered Accountant and not an auditor.
  • The CPA will summarize the financial statements of this individual, compile all tax returns due from them in one file which can then go through some basic editing before being submitted for approval or denial based on whether there are any errors within it.
  •  In order to perform an audit of accounts for a Chartered Accountants firm, one must be experienced in both accounting and law.
  •  An internal auditor of the assessee cannot be appointed as a tax audient, which has been challenged by many audit firms.
  •  It is against the law for an accountant to accept more than 45 tax audit assignments in a particular financial year.
Can a management remove a tax auditor?

The management is authorized to remove a tax accountant if he/she has delayed the submission of a report so much that it is no longer possible for them to submit by due date. A CA cannot be removed because they submitted an adverse audit or on assessor’s apprehension about what might happen with future reports, which would lead being unfavorable towards company finances- this includes investors’ losses as well! If ICAI finds out through its ethical standards board that there were unfair grounds behind removing anyone from their position at work place then these individuals will get rehired immediately upon completion

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