Advertisement. Further some professionals are of an opinion that no audit is required in such a case. 1 crores but does not exceeds 5 crore ]. If in this case the aggregate cash receipts and aggregate cash payments do not exceed 5% then the threshold limit will become Rs 5 crores and thus Audit u/s Sec 44AB(a) won’t be applicable. In this scenario, person will not require to audit as he satisfy condition stated in Sec 44 AB [a] and Sec 44 AD [1] ‘b] His total profit or income for that business which is eligible business and. There is some ambiguity in this case. Sec 44AD not applicable), Aggregate cash payments ≤ 5% total payments. 3CA and Form 3CD. Section 44AB of the Income Tax Act contains provisions pertaining to the tax audit under the Income Tax Audit. [ that above Rs. 1 crore in case of the business or Rs. Copyright © TaxGuru. d) Tax audit is in purview of 44AD. 3CA or 3CB) and such further prescribed particulars (in Form No. This was accompanied by a amendment in Explanation to Sec 44AB. Like you rightly said this 44AB amendment is no useful for turnover less then 2 cr but business having turnover between 2 to 5 can get benefit under this clause. 1.5 crores. (b) aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed five per cent of the said payment, this clause shall have effect as if for the words “one crore rupees”, the words “five crore rupees” had been substituted; or, (b) carrying on profession shall, if his gross receipts in profession exceed fifty lakh rupees in any previous year; or, (c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AE or section 44BB or section 44BBB, as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year; or, (d) carrying on the profession shall, if the profits and gains from the profession are deemed to be the profits and gains of such person under section 44ADA and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his profession and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year; or. The audit conducted by the chartered accountant of the accounts of the taxpayer in pursuance of the requirement of section 44AB​ is called tax audit. Clause (c) of section 44AB, inserted by the Finance Act 1997 w.e.f. Clause 44AB(c)-i 4. 5 crore if the following conditions are satisfied –. Accordingly 44AD(5) will also not be applicable. b) In case of profession, if gross receipt exceeds Rs. [ii] whose total turnover or gross receipts in the previous year does not exceed an amount of two crore rupees. However, w.e.f. Thanks. Audit of accounts of certain persons carrying on business or profession.44AB. “, ‘b] His total profit or income for that business which is eligible business and person is eligible assessee, is below 8 % of 6 % [ if his gross total turnover or receipts recd in banking mode]. Assessment Year 2020-21, the threshold limit for tax audit u/s 44AB(a), for a person carrying on business, is increased from Rs. In such case, there are two possibilities as below : ‘a] His total profit or income for that business which is eligible business and person is eligible assessee, is more than or equal to 8 % of 6 % [ if his gross total turnover or receipts recd in banking mode] . Penalty for not getting accounts audited under Section 44AB. 50 Lakhs. If profit is at least 50% of gross receipts of profession, then one can go for sec 44ADA nd avoid tax audit. assessment year 1998-99, provides that in the case of an assessee carrying on a business of the nature specified in sections 44AD, 44AE , tax audit will be required, if he claims his income to be lower than the presumptive income deemed under the said sections. B] ] If person carrying on business, his total total sales, turnover, gross receipts is Rs. ​​​​​​​The report of the tax audit conducted by the chartered accountant is to be ​furnished in prescribed form i.e. 50 lakhs in the previous year. Is the new amendment giving an option to assessee (who satisfy the conditions) to refrain from filing tax audit report? However GST Audit will be applicable if registered under GST (GST Audit threshold limit being Rs 2 crore). Section 44AB. Recently, we have discussed in detail section 44AA (maintenance of accounts by certain persons carrying on profession or business) of IT Act 1961. 3CB [See rule 6G(1)(b)] Audit report under section 44AB of the Income -tax Act 1961, in the case of a person referred to in clause (b) of sub - rule (1) of rule 6G The five clauses of section 44AB under which tax audit can be carried out are – a. If total income exceeds basic exemption limit only then tax audit is applicable. While the turnover limit for Sec 44AB is INR 1 Cr, turnover limit for Sec 44AD is INR 2 Cr. So, first of all, let us read what the bare act has to say: (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year, Provided that in the case of a person whose—, (a) aggregate of all amounts received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed five per cent of the said amount; and. However, according to section 271B​, no penalty shall be imposed if reasonable cause for such failure is proved. 08 September 2014 I have to Audit But there is a problem with in Auditor info.Software is showing there 6 option. Your email address will not be published. but New Regime is better for net taxable income above 15Lacs. The new proviso to section 44AB providing the enhanced turnover limit of Rs. Where a person does not declare profit in accordance with Sec 44AD(1) in any AY (i.e. 2. In order to submit a comment to this post, please write this code along with your comment: ade3c276b2177f4da990677856cad2a3. 2] Person whose total cash receipts and total cash payments does  exceeds 5 % of such receipts or payments. Audit report under section 44AB of the Income-tax Act,1961 in a case where the accounts of the business or profession of a person have been audited under any other law: Download: Form 3CB-3CD: Audit report under section 44AB of the Income-tax Act,1961, in the case of a person referred to in clause (b) of sub-rule (1) of rule 6G: Download: Form 3CEB 13 Every person,— (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year; or (b) carrying on profession shall, if his gross receipts in profession exceed 14 [twenty-five] lakh rupees in … 4. Clause. Is it really so? Nice , feeling like you r talking diectly…, Your email address will not be published. AY 20-21). Audit will not be applicable since the assessee can go for presumptive taxation scheme u/s 44AD. 1) Up to AY 2019-20, a person carrying on business was compulsorily required to get his accounts audited by a chartered accountant, if his total sales, turnover or gross receipts (as the case may be) in business for the year exceeds Rs. So unfair in both amended for low taxable income people compared to middle and high taxable income. I had the same thought regarding this. So unless one had Income more then 14 to 15 lacs , old regime maybe be better … Thank for such a wonderful chart and explanation. Join our newsletter to stay updated on Taxation and Corporate Law. Thus, where audit is done under other law then 3CA plus 3CD is applicable instead of 3CB plus 3CD. If my Interest Income is over and above 1 cr, Will I need to get audited my books under sec 44AB. (2) The particulars which are required to be furnished under section 44AB shall be in Form No. A tax audit is an audit which is necessary by the Income Tax Act, if the annual gross turnover/receipt of the taxpayer exceed the specified limit. 1 crore. For this purpose, section 44AB of the Income Tax Act, 1961 is amended vide clause 23 of the Finance Bill, 2020. The provisions of Section 44AB have been amended by the Finance Act, 2020 giving rise to major confusion in the minds of businessmen and professionals alike. However, tax audit may be applicable under clause (b), (c), (d) & (e) when Sec 44AB is read with Sec 44AD. Clause 44AB(b) 3. 2] His aggregate of all payments in cash during the previous year does not exceeds 5 % of such payments. persons to whom Sec 44AD(1) applies). 3CB - Audit report under section 44AB of the Income-tax Act, 1961, in the case of a person referred to in clause (b) of sub-rule (1) of rule 6G; Form No. Under clause (a) if the person is carrying on business whose total sales, turnover or gross receipts, as the case may be, exceed Rs one crore. Section 44AB gives the provisions relating to the class of taxpayers who are mandatorily required to get their accounts audited from a chartered accountant. (e) carrying on the business shall, if the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year. 2] ] If his aggregate of all receipts and aggregate of all payments does exceeds 5 % of such receipts and payments . 92/2020- CT to 94/2020- CT, Extend due dates for Income Tax Audit & Returns for AY 2020-21, Extend Tax Audit/ITR due dates for AY 2020-21, ICAI requests for extension of various Income-tax due dates, Extend Due Dates for Tax Audit and Income Tax Return Filing, Extend Income Tax Audit & ITR Due dates for AY 2020-21, Extend due dates of Audit Reports, ITRs, GST Returns, VSV Scheme, Extend due date for filing ITR & Tax Audit Report- AY 2020-21, Extend Tax/TP Audit & ITR Due dates for AY 2020-21, Open letter for extension of Due dates under Income Tax and GST. These amendments of 44AB is applicable from A.Y. In this article I have tried to clarify the provisions by simplifying the language and presenting the information in the form of a chart. 1] His aggregate of all receipts in cash during the previous year does not exceeds 5 % of such receipts. In this scenario, . If the turnover exceeds INR 1 Cr (INR 5 Cr from AY 20-21), tax audit is applicable as per Section 44AB(a). Clause (c) of section 44AB, inserted by the Finance Act 1997 w.e.f. My question is regard to stock option trading – if I purchase a stock option on Sharekhan, and make a loss, is it deemed there is a cash payment? In order to submit a comment to this post, please write this code along with your comment: 748e6fecf2dae2ec32886f3bdf7bc508. 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