Tax Audit U/s 44AB limit has been proposed to increase up to Rs. 5Cr. from FY 2020-21 for MSME sector in Union Budget 2020 but several conditions apply.
Limits of Tax Audit (Sec. 44AB) under Income Tax Act:
Currently the account of an assessee need to be audited "if his annual gross turnover/receipts in Business exceeds Rs. 1 Cr." or "if his annual gross receipts in Profession exceeds Rs. 50 Lakh."
Amendment of Sec 44AB in Budget 2020, Apart from the current provision, a new provision also inserted in Sec. 44AB that has been proposed to increase the tax audit limit from '1 crore' to '5 crore' if a person's aggregate of all amounts received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed 5% of the said amount and aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed 5% of the said payment.
Whether this audit limit increased (Rs. 5 cr.) for only MSMEs.
The increased audit limit is applicable to small retailers, traders and shopkeepers who earn business income. But the increased audit limit is applicable to those whose sales/ receipts in cash and purchases/ payments in cash are less than 5%, otherwise the limit will remain Rs. 1 Cr.
Change in Due Dates of Audit and Income Tax Return filing:
According to Budget 2020, following are proposed, such as,
- Due date of Income Tax Return of Audited Tax payers (Sec. 44AB, 44ADA, 115JB etc.): 31st October.
- Due date to submit Tax Audit Report: One month prior to income tax return filing i.e. 30th September
You can find more articles on at https://thetaxsupport.com/blog/
Comments