Section 44AB - Audit of accounts of certain persons [Tax Audit] - Income Tax - Ready Reckoner - Income Tax

Section 44AB : Audit of accounts of certain persons [Tax Audit] WHO HAS TO GET HIS ACCOUNTS AUDITED ON COMPULSARY BASIS Threshold limit for Tax audit (a) A person carrying on business if his total sales, turnover or gross receipt in business for the PY(s) relevant to the AY exceeds 1 crore. In order to reduce compliance burden, the Finance Act 2020 w.e.f. AY 2020-21 has inserted proviso to increase threshold limit of tax audit increased from ₹1 crore to ₹ 5 crore the Finance Act, 2021 w.e.f. AY 2021-22 has increase threshold limit of tax audit increased from ₹ 5 crore to ₹ 10 crore in case of person carrying on business subject to the following condition - a) aggregate of all amounts received including amount received for sales, turnover or gross receipts during the PY, in cash, does not exceed 5% of the said amount; and b) aggregate of all payments made including amount incurred for expenditure, in cash, during the PY does not exceed 5% of the said amount. Note - For this purpose, the payment or receipt, as the case may be, by a cheque drawn on a bank or by a bank draft, which not account payee, would be deemed to be the payment or receipt, as the case may be, in cash. [ Inserted by Finance Act, 2021 [ w.e.f. AY 2021-22 ] (b) A person carrying on profession if his gross receipts in profession for the PY(s) relevant to the AY exceeds 50 lakh. (c) A person carrying on business covered u/s 44AE , 44AF , 44BB OR 44BBB - If such person claims that the profits and gains from the business are lower than the profits and gains computed under these sections (irrespective of his turnover), he shall get his accounts audited by Chartered Accountant on or before the specified date. (d) A person carrying on profession covered u/s 44ADA - If such person claims that the profits and gains from the business are lower than the profits and gains computed in accordance with the provisions of section 44ADA and if his income exceeds the maximum amount which is not chargeable to tax in any previous year, he shall get his accounts audited by Chartered Accountant on or before the specified date. (e) A person carrying on business covered u/s 44AD(4) - If such person claims that his income exceeds the maximum amount which is not chargeable to tax in any previous year This Section does not apply in the following case From AY 2018-17 to AY 2023-24:- This section shall not apply to the person, who declares profits and gains for the previous year in accordance with the provisions of section 44AD(1) and his total sales, turnover or gross receipts, as the case may be, in business does not exceed two crore rupees in such previous year. Form the AY 2024-25 :- This section shall not apply to a person, who declares profits and gains for the previous year in accordance with the provisions of section 44AD(1) or section 44ADA(1) . [Amended by FA, 2023 ] This section shall not apply to the person, who derives income of the nature referred to in section 44B or section 44BBA, on and from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later.