The Central Board of Direct Taxes (CBDT) extended the last date to file tax audit reports for companies and individuals to October 7, 2024, from September 30. Its September 29, 2024, circular states: “On consideration of difficulties faced by taxpayers and other stakeholders in electronic filing of various reports of audit under the provisions of the Income-tax Act,1961 (Act), CBDT, in the exercise of its powers under Section 119 of the Act, extends the specified date of furnishing of the report of audit under any provision of the Act for the Previous Year 2023-24, which was 30th September 2024 in the case of assesses referred in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act, to 071h October 2024.”

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What Is A Tax Audit, And Who Can Conduct It?

The tax audit is the process of reviewing the accounts of businesses or professionals. A chartered accountant holding a certificate of practice can conduct the tax audit for such individual professionals and companies.

Why Is It Conducted?

A tax audit confirms that the taxpayer did the record-keeping properly, which helps maintain the records. The idea is to ensure that the account books are maintained correctly, the details are updated, and all provisions are considered. The tax audit report makes it easier for the tax authorities to verify and process the details.

Which Individuals Need To File The Audit Report?

The Income-tax Act, 1961, lays down the rules under section 44AB. Let us check the categories of individuals who need to file this tax audit report.

Professionals: In the case of individuals engaged in professions, such as doctors, lawyers, etc., who have a gross receipt of more than Rs 50 lakh in a financial year, they must file the tax audit report.

Presumptive Taxation Scheme: Professionals under presumptive taxation under Section 44ADA, whose income exceeds the basic exemption limit and whose declared profit is lower than 50 per cent of the gross receipts, must also file a tax audit report.

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What Is The Penalty For Not Filing The Audit Report By The Due Date?

If one fails to file a return by the due date, there is a penalty under section 271B of the Income-tax Act.

· It could be 0.5 per cent of the total turnover, sales, or business receipts for the relevant financial year.

· The amount can be a maximum of Rs 1.5 lakh.

If the taxpayer proves that the delay was due to a proper reason, the authorities (assessing officer) may waive the penalty.

Not all individual investors are required to file the tax audit report, but those who need to file it should do it on time.