The section 44AB states that any person carrying out business / Profession is required to get his audit done. This is applicable if S/He falls under the following category:
- Business – If the Gross Turnover exceeds Rs 1 Crore during any previous Year.
- Profession – If Gross Receipts exceed Rs 25 Lakh in any previous Year.
If any person who falls under these consideration fails to get his audit done before the date which is specified, then they will be liable for a penalty of 1/2% of the turnover or the gross receipts up to a maximum penalty of Rs. 1,50,000.
Non-Compliance with the provisions of the above act shall attract Penalty under section 271B of the Income Tax Act.
However, the penalty shall be relaxed if there is a reasonable cause for such failure, as per Section 273B. The examples of instances which have been accepted as “Reasonable Cause” are:-
- Resignation of the Tax Auditor and Consequent Delay
- Death or physical inability of the partner in charge of the Accounts
- Labor Problems such as strikes, lock-outs for a long period
- Loss of Accounts because of Fire/Theft etc. beyond the control of the Assesses
- Natural Calamities
Any person who is covered by the section 44AB has to get his accounts audited and obtain the audit report before the due date. Due date for obtaining audit report is on or before 30th September of the appropriate financial year. Eg: Tax audit report for the financial year 2014-15 has to be obtained on or before 30th of Sept 2015.
Related Topics: Tax Audit