- Tax audit is applicable to certain categories of taxpayers whose turnover or gross receipts exceed the prescribed threshold limits.
- For businesses, tax audit is generally required if turnover exceeds ₹1 crore in a financial year (subject to change based on updates to tax laws).
2. Appoint a Chartered Accountant (CA)
- Taxpayers subject to tax audit must engage a qualified Chartered Accountant to conduct the audit and issue an audit report.
3. Maintain Books of Accounts
- Maintain accurate and complete books of accounts, financial statements, and supporting documents for the relevant financial year.
4. Conduct the Tax Audit
- The appointed CA will examine the books of accounts and verify the financial transactions to ensure compliance with tax laws.
- The CA will also reconcile the information in the books of accounts with the tax returns filed.
5. Obtain Tax Audit Report
- Based on the audit findings, the CA will prepare the tax audit report in the prescribed format (Form 3CA/3CB and Form 3CD) as per the Income Tax Act.
6. File Income Tax Return
- After the tax audit is completed and the audit report is obtained, file the income tax return using the appropriate ITR form, such as ITR 3, ITR 4, etc.
7. Submit Tax Audit Report
- Attach the tax audit report (Form 3CA/3CB and Form 3CD) along with the income tax return while filing.
8. Verify the Income Tax Return
- E-verify the income tax return using any of the available methods like Aadhaar OTP, Net Banking, Demat Account, Bank Account, or EVC (Electronic Verification Code).
- E-verification must be done within 120 days of filing the return; otherwise, the return will not be considered valid.
9. Pay Tax Due (if applicable)
- If any additional tax liability arises due to the tax audit, pay the tax along with interest, if applicable, before filing the return.
10. Keep Audit Records
- Maintain copies of the tax audit report, financial statements, and other relevant documents for future reference and tax assessments.
11. Seek Professional Guidance
- Tax audit can be complex, so seek professional advice from a qualified Chartered Accountant to ensure compliance with tax laws.
Ensure timely and accurate filing of income tax returns and adhere to the tax audit requirements to avoid penalties and legal issues.
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