Tax audit query

Section 44AB of the Income-tax Act (‘the Act’) makes it obligatory for every person carrying on business to get his accounts of any previous year audited if his total sales, turnover or gross receipts exceed one crore rupees.

However, if an eligible person opts for presumptive taxation scheme as per section 44AD(1) of the Act, he shall not be required to get his accounts audited if the total turnover or gross receipts of the relevant previous year does not exceed two crore rupees.

The higher threshold for non-audit of accounts has been given only to assessees opting for presumptive taxation scheme under section 44AD

On 23 Aug. 2018 also, the ICAI has amended the provisions/ regulations relating to ‘specified number of tax audits’ (ceiling limit) that can be conducted by a practicing CA/ Firm, according to which tax audits conducted under Section 44AD, 44ADA and 44AE of the Income-tax Act, 1961 (Presumptive Taxation) shall not be taken into account for the purpose of reckoning the “specified number of tax audit assignments”.