Tax Audit FY 2020-21
According to the amended Income tax Provisions, taxpayers are compulsory to get their accounts tax audited if their sales, turnover or gross receipts from business exceed INR 10 Crore or Rs.5 Crore under LLP. here we have narrated the Tax audit & its applicability FY 2020-21 to business and LLP.
Summary of Tax audit fy 2020-21:
Up-to 1 Crore: no tax audit applicable even if the cash payment/ receipt is above 5%
From 1 Crore to 10 Crore: no tax audit if the cash exposure is up-to 5% or less
More than 10: tax audit is applicable for all
For LLP Tax:
Up to 5 Crore is no tax audit. If the cash payment and receipts limited to 5%
How check the cash exposure limit in tally?
Tally > receipts & Payments> Total receipts LESS Opening cash/bank
Tally > receipts & payments > Total Payments LESS Closing cash/bank
Cash receipts > cash account> Debit side Total
cash payments> Cash accounts > credit side total
Result IF both cash receipt & payment is more than > 5%, then TAX AUDIT REQUIRED, if both is up-to 5%, then NO TAX audit
If tax audit not applicable u/s44ab, for above criteria then you are out of TAX AUDIT. Here is a catch, for whose Turnover above 1 Crore, You might have to prepare an Independent Auditor’s report with Audited Balance sheet and PnL. Statement because for GST or Bank Purposes it may be required. but do not attach 3CB 3CD ( Instead attach Independent Auditor’s report ). DO NOT UPLOAD 3CB 3CD. After Signing in report, Straightway file ITR. Also make sure while uploading ITR you have to select 44AB – Not applicable.
U/s 44AD (Business Income),
U/s 44ADA (professional service like Legal, medical, accounting, engineering etc.),
U/s 44AE (Goods carriages)
Under presumptive tax scheme, Assesse (eligible only Individuals, Huf, and partnership firm) no need to maintain the books of accounts, Up-to 2 Crore turnover can be filed under presumptive tax:
The tax audit applicability under presumptive tax u/s 44ad is as follows:
0 to 2 Crore, where the net profit is 6% /8% or less, then tax audit is compulsory.
Since the due date for tax audit filing is nearing for the FY 2020-21, the taxpayers shall share the required information to auditors, so that it ensures orderly filing, and also identify and report any glitches encountered during the process.
For more clarification about Tax audit and filing support, please reach our support:
support@TeamIndia.co.in
NO 188/1, 1st Flr
Sahakarnagar, Bangalore 560092
Phone: 7019827351, 8792858436 , 7892256853
