45 limit of tax audits

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CA ANAND MASHETTY (Querist)
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30 July 2013 for those whose net profit below 8% are required to be audited u/s. 44ab. and those audits are not not covered in the limit of 45 tax audits.
my question is how income tax site differentiate normal tax audits and these tax audits while filing audit report. If it will not allow to file 46th audit report CA will lost actual tax audits if those 45 reports include some below 8% audits.

CA ANAND MASHETTY

CA ANAND MASHETTY (Querist)
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13 August 2013 please reply

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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14 July 2024 When filing tax audits under Section 44AB of the Income Tax Act, it's important to understand how the system differentiates between audits conducted under different sections and provisions, particularly concerning the limit of 45 tax audits.

### Differentiation of Audits:

1. **Section 44AB Audits:**
- Audits under Section 44AB cover various scenarios including businesses exceeding turnover thresholds, professionals, and cases where income declared is lower than the prescribed rate under presumptive taxation (like Section 44AD).
- These audits are categorized based on the specific section (44AB) and the requirements therein (like turnover limits, income criteria, etc.).

2. **Presumptive Income Audits:**
- Audits conducted specifically due to income being lower than the presumptive income rate (e.g., 8% under Section 44AD) are treated differently.
- They are identified based on the reason for the audit, such as non-compliance with the presumptive income provisions.

### Filing Limit and System Management:

- The Income Tax Department's e-filing portal and systems are designed to manage and differentiate audits based on the applicable provisions.
- When filing audit reports, Chartered Accountants (CAs) are required to specify the section under which the audit is being conducted (e.g., 44AB for regular audits, and specific subsections or provisions for presumptive income audits).
- The system should automatically distinguish between audits under Section 44AB and those under other sections like Section 44AD where audits are necessitated due to income falling below the prescribed rate.

### Limit of 45 Tax Audits:

- The limit of 45 tax audits per CA is applicable specifically to audits conducted under Section 44AB.
- Audits conducted under other sections (like those under presumptive income provisions due to income below prescribed rates) are not counted towards this limit.
- If a CA reaches the limit of 45 audits under Section 44AB, they can still conduct audits under other sections without any restriction on numbers.

### Conclusion:

The Income Tax e-filing portal and systems are equipped to handle different types of audits under various sections of the Income Tax Act. Audits conducted due to income falling below prescribed rates under presumptive income schemes are managed separately and do not impact the limit of 45 tax audits under Section 44AB.

If you have specific concerns or encounter issues while filing audits, consulting with a tax professional or the Income Tax Department’s support services would provide further guidance tailored to your situation.

If you have any more questions or need further clarification, feel free to ask!

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