Manswi Panchbhai
A tax audit involves examining a business or professional's financial documents to ensure they adhere to the Income Tax Act. This process includes a detailed verification of reported income, expenses, and deductions, as well as the accuracy of tax computations.
The deadline for filing income tax audits has been extended by the Income Tax Department to October 31, 2025, from the initial date of September 30, 2025.
The extension was approved after appeals from various professional bodies, including chartered accountant associations, which emphasized the difficulties faced by taxpayers and practitioners in submitting audit reports on time.
A tax audit is required if a business’s turnover exceeds ₹1 crore in a year, or ₹10 crore if cash transactions are less than 5% of total receipts and payments.
Not submitting a tax audit report as required by Section 44AB may result in a penalty according to Section 271B of the Income Tax Act. A fine of ₹1.5 lakh or 0.5% of the turnover, whichever amount is less.
The income tax audit necessitates that the Chartered Accountant examines financial documents including the cash book, ledger, bank statements, inventory records, and sales/purchase invoices.
The filing process involves compiling your financial statements, verifying compliance with audit requirements, and submitting the audit report electronically via the income tax portal.
Timely submission ensures your records remain in good standing with tax authorities. Delays beyond the deadline may attract penalties or increased scrutiny.
Consulting a qualified Chartered Accountant is advisable. They can provide personalized advice based on your financial documents, ensure you meet the updated regulations on time, and assist in avoiding penalties or mistakes in filing.