{"id":6339,"date":"2023-10-21T11:35:44","date_gmt":"2023-10-21T11:35:44","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=6339"},"modified":"2025-02-25T13:45:25","modified_gmt":"2025-02-25T13:45:25","slug":"income-tax-audit-applicability-application-in-india","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/income-tax-audit-applicability-application-in-india\/","title":{"rendered":"Income Tax Audit Applicability &#038; Application in India"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d45edbdf16f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d45edbdf16f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/income-tax-audit-applicability-application-in-india\/#Myth_vs_Facts_%E2%80%93_Decoding_Tax_Audit_us_44ABe_44AD\" title=\"Myth vs Facts &#8211;\u00a0Decoding Tax Audit u\/s 44AB(e):44AD\u00a0\">Myth vs Facts &#8211;\u00a0Decoding Tax Audit u\/s 44AB(e):44AD\u00a0<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/income-tax-audit-applicability-application-in-india\/#Business_loss\" title=\"Business loss\">Business loss<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/income-tax-audit-applicability-application-in-india\/#All_about_Presumptive_Taxation_Scheme_us_44AD_44ADA_and_44AE\" title=\"All about Presumptive Taxation Scheme us 44AD, 44ADA and 44AE\">All about Presumptive Taxation Scheme us 44AD, 44ADA and 44AE<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/income-tax-audit-applicability-application-in-india\/#Quick_Comparison_Statutory_Audit_vs_Tax_Audit\" title=\"Quick Comparison: Statutory Audit vs. Tax Audit\">Quick Comparison: Statutory Audit vs. Tax Audit<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Myth_vs_Facts_%E2%80%93_Decoding_Tax_Audit_us_44ABe_44AD\"><\/span><a href=\"https:\/\/carajput.com\/publications\/decoding-tax-audit-u-s-44ab-e-44ad-myth-vs-facts.pdf\"><span style=\"color: #000080;\"><strong>Myth vs Facts<\/strong><\/span> &#8211;\u00a0<span style=\"color: #000080;\"><strong>Decoding Tax Audit u\/s 44AB(e):44AD\u00a0<\/strong><\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-26968\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/Tax-Audit-1-1.jpg\" alt=\"Tax Audit 1.\" width=\"1152\" height=\"627\" \/><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-26969\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2021\/09\/Tax-audit-2.jpg\" alt=\"Tax audit 2.\" width=\"1145\" height=\"689\" \/><\/p>\n<table style=\"height: 649px;\" width=\"945\">\n<tbody>\n<tr>\n<td><span style=\"color: #000080;\"><strong><em>Nature of Business or Profession<\/em><\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong><em>When audit is Mandatory?<\/em><\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td colspan=\"2\">\n<h3><span class=\"ez-toc-section\" id=\"Business_loss\"><\/span><span style=\"color: #ff9900;\"><strong>Business loss<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/td>\n<\/tr>\n<tr>\n<td><strong>In case of loss from carrying on of business and not opting for presumptive taxation scheme<\/strong><\/td>\n<td>Total sales, turnover or gross receipts exceed Rs 1 Crore<\/td>\n<\/tr>\n<tr>\n<td><strong>If taxpayer\u2019s total income exceeds basic threshold limit but he has incurred a loss from carrying on a business (not opting for presumptive taxation scheme)<\/strong><\/td>\n<td>In case of loss from business when sales, turnover or gross receipts exceed 1 Crore, the taxpayer is subject to tax audit under 44AB<\/td>\n<\/tr>\n<tr>\n<td><strong>Carrying on business (opting presumptive taxation scheme under section 44AD) and having a business loss but with income below basic threshold limit<\/strong><\/td>\n<td>Tax audit not applicable<\/td>\n<\/tr>\n<tr>\n<td><strong>Carrying on business (presumptive taxation scheme under section 44AD applicable) and having a business loss but with income exceeding basic threshold limit<\/strong><\/td>\n<td>Declares taxable income that is less than the limitations set by the presumptive tax scheme but more than the basic threshold limit.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span class=\"ez-toc-section\" id=\"All_about_Presumptive_Taxation_Scheme_us_44AD_44ADA_and_44AE\"><\/span><a href=\"https:\/\/carajput.com\/publications\/all-about-presumptive-taxation-scheme-us-44ad-44ada-and-44ae.pdf\"><span style=\"color: #000080;\">All about Presumptive Taxation Scheme us 44AD, 44ADA and 44AE<\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-6340\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-1-.jpg\" alt=\"\" width=\"903\" height=\"1832\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-1-.jpg 631w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-1--148x300.jpg 148w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-1--505x1024.jpg 505w\" sizes=\"(max-width: 903px) 100vw, 903px\" \/><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-6341\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-2.jpg\" alt=\"Presumptive Taxation Scheme u s 44AD, 44ADA and 44AE 2\" width=\"940\" height=\"2085\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-2.jpg 577w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-2-135x300.jpg 135w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-2-462x1024.jpg 462w\" sizes=\"(max-width: 940px) 100vw, 940px\" \/><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-6342\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-3.jpg\" alt=\"Presumptive Taxation Scheme u s 44AD, 44ADA and 44AE 3\" width=\"919\" height=\"959\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-3.jpg 594w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/Presumptive-Taxation-Scheme-u-s-44AD-44ADA-and-44AE-3-287x300.jpg 287w\" sizes=\"(max-width: 919px) 100vw, 919px\" \/><\/p>\n<h3 data-start=\"207\" data-end=\"264\"><span class=\"ez-toc-section\" id=\"Quick_Comparison_Statutory_Audit_vs_Tax_Audit\"><\/span><span style=\"color: #000080;\"><strong data-start=\"211\" data-end=\"262\">Quick Comparison: Statutory Audit vs. Tax Audit<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-8668\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/1740460493039.jpeg\" alt=\"Statutory Audit vs. Tax Audit\" width=\"1201\" height=\"545\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/1740460493039.jpeg 1201w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/1740460493039-300x136.jpeg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/1740460493039-1024x465.jpeg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/1740460493039-768x349.jpeg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/10\/1740460493039-800x363.jpeg 800w\" sizes=\"(max-width: 1201px) 100vw, 1201px\" \/><\/p>\n<table style=\"height: 511px;\" width=\"889\" data-start=\"266\" data-end=\"1425\">\n<thead data-start=\"266\" data-end=\"329\">\n<tr data-start=\"266\" data-end=\"329\">\n<th data-start=\"266\" data-end=\"290\"><strong data-start=\"268\" data-end=\"278\">Aspect<\/strong><\/th>\n<th data-start=\"290\" data-end=\"312\"><strong data-start=\"292\" data-end=\"311\">Statutory Audit<\/strong><\/th>\n<th data-start=\"312\" data-end=\"329\"><strong data-start=\"314\" data-end=\"327\">Tax Audit<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"388\" data-end=\"1425\">\n<tr data-start=\"388\" data-end=\"485\">\n<td>Governing Act<\/td>\n<td>\ud83d\udccc Companies Act, 2013 (Sec 139-147)<\/td>\n<td>\ud83d\udccc Income Tax Act, 1961 (Sec 44AB)<\/td>\n<\/tr>\n<tr data-start=\"486\" data-end=\"710\">\n<td>Applicability<\/td>\n<td>\ud83d\udccc Mandatory for all registered companies, irrespective of turnover<\/td>\n<td>\ud83d\udccc Applicable to Companies, LLPs, Partnership Firms, and Individuals if turnover\/professional receipts exceed the prescribed limit<\/td>\n<\/tr>\n<tr data-start=\"711\" data-end=\"890\">\n<td>Threshold Limit<\/td>\n<td>\ud83d\udccc No threshold; compulsory for all companies<\/td>\n<td>\ud83d\udccc Required if Business Turnover\/Professional Receipts exceed the threshold (Refer attachment for limits)<\/td>\n<\/tr>\n<tr data-start=\"891\" data-end=\"1051\">\n<td>Purpose<\/td>\n<td>\ud83d\udccc Ensures fairness, reliability, and transparency in financial statements<\/td>\n<td>\ud83d\udccc Ensures accurate tax reporting and proper maintenance of books<\/td>\n<\/tr>\n<tr data-start=\"1052\" data-end=\"1194\">\n<td>Due Date<\/td>\n<td>\ud83d\udccc Within 6 months of financial year-end, before AGM<\/td>\n<td>\ud83d\udccc Due date for filing report: 30th September of the assessment year<\/td>\n<\/tr>\n<tr data-start=\"1195\" data-end=\"1425\">\n<td>Consequences of Non-Compliance<\/td>\n<td>\ud83d\udccc Company Penalty: \u20b925,000 \u2013 \u20b95,00,000<br \/>\n\ud83d\udccc Officers in Default: \u20b910,000 \u2013 \u20b91,00,000 fine OR up to 1-year imprisonment<\/td>\n<td>\ud83d\udccc Penalty: Lower of 0.5% of turnover or \u20b91,50,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p data-start=\"1427\" data-end=\"1610\">We are transparency and financial discipline. Recognition under the Income Tax Bill 2025 will enhance compliance and accountability in financial reporting.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Myth vs Facts &#8211;\u00a0Decoding Tax Audit u\/s 44AB(e):44AD\u00a0 Nature of Business or Profession When audit is Mandatory? Business loss In case of loss from carrying on of business and not opting for presumptive taxation scheme Total sales, turnover or gross receipts exceed Rs 1 Crore If taxpayer\u2019s total income exceeds basic threshold limit but he &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[98],"tags":[867,560],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/6339"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=6339"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/6339\/revisions"}],"predecessor-version":[{"id":6344,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/6339\/revisions\/6344"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=6339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=6339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=6339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}