Tax Audit

Income Tax Audit

The Income-tax Law mandates that the taxpayer get the audit of the accounts of his business/profession from the perspective of Income-tax Law.

An income Tax Audit is important for a company, where the government checks for tax compliance of an entity to validate income and deductions. Income Tax Audit is compulsory for all Indian citizens and it comes under the Income Tax Act – Section 44AB.

Audit of Accounts

Audit of Accounts is mandatory if the total turnover of a business is Rupees 1 crore in any previous financial year, or the total receipts by profession is more than Rupees 50 lakh.

Section 44AD

Everything related to an income tax audit is contained in Section 44AD of the Income Tax Act which was enacted in 1961. Eligibility for income tax audit comes under Section 44AB. This section mainly describes the category of taxpayers.

The objectives of Income Tax Audit

The Income Tax Audit has been mandated by the government of India to achieve the following objectives:

  1. All income taxpayers should maintain their financial records or account for them in a financial year, and this can be done by a certified tax auditor.
  2. The account should be audited by a tax auditor from the tax authorities of the Government of India.
  3. Verification of important information related to conducting tax audits saves time as an authorized person has helped in verifying all the details related to the business of the company

The Auditor

Any person trained as a Chartered Accountant under the Chartered Accountants Act 1949, is called an Auditor during his/her professional life.

The purpose of appointing an auditor of a Company

The main objective behind the appointment of an auditor in a company is to safeguard all the interests of its shareholders. This job can be done well by an Auditor because he knows all the rules and regulations of the government, so he/she can audit all the accounts of the Company effectively.

ADT- 1 Form for Appointment for First Auditor

When the first Auditor is appointed in a company under the approval of the Register of Companies – ROC it is done in a due course and manner as per the new Companies Act 2013 under Section 139(1). This is done using Form ADT-1.

Type of documents are required to submit Form ADT-1

  • It requires a copy of the Company’s Board resolution / Annual General Meeting passed resolution.
  • The appointment for the Auditor is written in the Consent Form.
  • Copy of the Qualification Certificate of the Auditor as per the Auditor Act under Section 141.

Audit Services we offer.

  1. Appointment of an Auditor 1 (Form ADT-1)
  2. Income Tax Audit (Above 1 Crore Up to 2 Crore)
  3. Income Tax Audit (Above 2 Crore Up to 5 Crore)
  4. Income Tax Audit (Above 5 Crore Up to 10 Crore)
  5. Income Tax Audit (Up to 1 Crore)
  6. Appointment of an Auditor 1 (Form ADT-1)
  7. Income Tax Audit (Above 1 Crore Up to 2 Crore)
  8. Income Tax Audit (Above 2 Crore Up to 5 Crore)
  9. Income Tax Audit (Above 5 Crore Up to 10 Crore)

Leave a Reply

Your email address will not be published.