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Tax Audit comes under the purview of Section 44AB of the Act which specifies the persons who are required to get audit of their books of accounts. This section specifies particularly that except for the persons coming under the purview of the sections mentioned in the text of Section 44AB , all other have to get their accounts audited under Section 44AB.
The object of audit under section 44AB is only to assist the Assessing Officer in computing the total income of an assessee in accordance with different provisions of the Act.
This Audit effectively curbs tax Evasion and ensure tax compliance. Therefore,
Analysis of Section 44AB: Applicability: This section is applicable to every person:
Penalty for failure to get accounts audited:
If any person who is required to get his accounts audited by an Accountant as compliance provision of 44AB, before the specified date fails to do so shall be liable for penalty under section 271B. The amount of penalty shall be one-half percent of turnover / gross receipts or Rs.150000/- whichever is lower. This penalty shows the seriousness that the Government affixes towards Tax Audit under section 44AB.
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