What we do
Our work in this practice group is structured around the records, deadlines, and decisions involved:
- Systematic examination of books of account and financial records.
- Identification of applicable Income Tax audit and reporting requirements.
- Review of tax-related transactions, deductions, expenses, and disclosures.
- Identification of potential compliance gaps before filing.
- Accurate preparation and filing support for the applicable tax audit report.
- Better coordination between accounting records, financial statements, and Income Tax Return reporting.
- Guidance on tax audit-related queries and compliance matters.
How the engagement works
Income Tax audit requirements are primarily governed by Section 44AB of the Income-tax Act, 1961, along with the applicable rules, thresholds, conditions, and reporting requirements. Depending on the nature and level of business or professional receipts, turnover, income, and other circumstances, a taxpayer may be required to get accounts audited and furnish the prescribed tax audit report. The applicable clauses and reporting requirements must be evaluated based on the taxpayer’s specific facts and the law applicable for the relevant assessment year.
Scenario 1: A business crosses the applicable threshold or otherwise falls within the provisions requiring a tax audit under the Income-tax Act.
Scenario 2: A professional needs to determine whether their receipts and tax position require an Income Tax audit.
Scenario 3: A partnership firm or LLP requires an independent review of its books and tax-related reporting before filing its Income Tax Return.
Scenario 4: A business wants to identify tax audit reporting issues, disallowances, or documentation gaps before completing its annual tax compliance.
Scenario 5: Management requires professional assistance in reconciling financial statements, books of account, and tax audit reporting before the statutory filing deadline.
Audit Applicability Assessment
We review the taxpayer’s business or professional activities, turnover or receipts, income, and other relevant circumstances to determine whether the applicable Income Tax audit requirements are triggered.
Books & Records Examination
We examine books of account, ledgers, invoices, bank records, expense records, fixed assets, and other financial information relevant to the audit.
Tax Compliance Review
We review relevant deductions, expenses, payments, disallowances, tax deductions, statutory dues, and other matters that may require reporting under the applicable tax provisions.
General questions
01What is an Income Tax Audit?
An Income Tax Audit is an examination of specified books of account and financial records to verify compliance with applicable provisions of the Income-tax Act and to report prescribed particulars to the Income Tax Department.
02Who is required to get an Income Tax Audit done?
Tax audit applicability depends on the taxpayer’s nature of business or profession, turnover or gross receipts, income, and other conditions prescribed under the Income-tax Act. Section 44AB contains the principal provisions, subject to applicable thresholds and conditions.
03What is Section 44AB of the Income-tax Act?
Section 44AB contains provisions relating to tax audit requirements for specified taxpayers. The exact applicability depends on the nature and circumstances of the taxpayer and the provisions applicable for the relevant assessment year.
04What documents are required for a tax audit?
Documents may include books of account, ledgers, cash book, bank statements, sales and purchase records, expense details, fixed asset registers, loan and investment details, statutory payment records, financial statements, and other information relevant to the audit.
05What is checked during an Income Tax Audit?
The audit may involve examination of books and records, income and expense classification, deductions, payments, statutory dues, depreciation, loans, related transactions, tax compliance, and other matters required to be reported under the applicable provisions.
06Can you also help with ITR filing after the tax audit?
Yes. We can coordinate the tax audit report with the preparation and filing of the applicable Income Tax Return so that the financial information and tax reporting are appropriately aligned.
