Audit Of Accounts of Certain Persons under Income Tax Act. (Sec. 44AB)

Sec. 44AB of Income Tax Act, 1961 deals in provisions of audit of Books of accounts by certain persons under Income tax act, 1961.

  1. Who are compulsorily required to get his books of accounts audited?

The following persons are required to get their books of accounts audited by a chartered accountant in practise: – 

Types Of TaxpayersTax Audit Coverage
A person carrying on businessIf his total sales for the previous year relevant to assessment year exceed Rs. 1 crore. If taxpayer opts for presumptive taxation and his turnover does not exceed Rs. 2 crores then this provision is not applicable on him.
A person carrying on business if next two conditions are satisfiedIf below two conditions is satisfied by assessee then tax audit is only required if his total turnover exceeds Rs. 10 crores from A.Y 2021-22 onwards.Aggregate of all cash payments made during the year do not exceed 5% of total of such payments.Aggregate of all cash receipt made during previous year do not exceed 5% of such total receipts.
A person carrying on professionIf his total gross receipt in relevant previous year exceeds Rs. 50 Lacs.

These are broad categories of persons who are required to get their Books of accounts audited as per the provisions of Sec. 44AB.

Apart from above, below mentioned categories are also required for Tax Audit: –

A person covered u/s 44 AD, 44ADA & 44AE: – If such person claims that the profits and gains from business or profession is lower than the profits and gains computed as per method of computation given in relevant section, then in that case also, such person needs to get their Books of accounts audited u/s 44AB.

2.  Due date for getting accounts audited u/s 44AB: – 

Types of taxpayersDue Date for Tax Audit
Company30th September of relevant Assessment year.
Any other person who has to mandatorily gets his accounts audited under the above provisions30th September of relevant Assessment year.
Any person who is subject to the transfer pricing provisions31st October of relevant Assessment year.


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