Auditing – Tax Audit
Tax auditing is a governmental procedure in which IRS depart conduct examination to verify the information provided by the party or a person itself to confirm that it is not a fraud or inaccurate tax return and IRS select these tax return to investigate or to examine both intentionally and randomly. This audit can only be done by an auditor on behalf of the government to confirm that every single information of income tax is compiled by the assesse or not. There is a provision regarding the tax audit that can assesse done by a chartered accountant or any other individual who can be appointed as auditor under section 141 of Companies act 2013.
Section 44(AD) and the compulsion of a tax audit.
Some points are mandated by the government under section 44(AB) regarding tax audit that if your gross sales and gross receipt of a business exceed one crore they are under this section to pay the tax and should be audited too. For a small business, the amount will be twenty-five laces or more than that amount. If some business or professions comes under certain sections namely 44AD, 44AE, 44BBA and 44B these gives them exemption from the taxes as they don’t have that much turnover. Specifically of we talk about section 44AD this section is applicable on the profit of any business it doesn’t matter whether it is retail or construction business and according to this section especially the income of assesse deemed to be 8% of total turnover or gross receipt. This section only followed when the profession or business turnover is less than twenty-five laces and if an assesse running both business or profession it will only be applicable at business income. There is a compulsion that turnover of that business or profession should or will cover excise duty, VAT, cess and other levy which should not be shown separately in sthe ale invoice.
What is section 44E states?
This section goes with the individual who shows personal engagement in playing, leasing or hiring a truck. It is mandated that he can not own more than ten trucks including the previous year and if any new purchase or sale of trucks as they can only levy on ten tracks in total. That individual should have a monthly income of rupees five thousand if he owns heavy vehicle and rupees four thousand five hundred if don’t own any heavy vehicle or the income declared by the assesse which ever is high.