In the previous article, we have discussed about compulsory maintain books of accounts, persons who are required to maintain books of accounts and which books are compulsory to maintain for that persons. In this article, we will discuss about compulsory audit of accounts for A.Y.2012-13 and A.Y.2013-14, persons who are required to audit books of account, penalty on failure to audit, requirement of audit etc. Reader can ask their query on the topic of “Mandatory Audit of account books” by submitting the comment form given below.
In Case of Business
If a turnover or gross receipts (A.Y. 2013-14, w.e.f. 1-4-2013 by Finance Act, 2012) of a business is Rs. 1 crore or more than that then Audit of books/accounts is mandatory u/s 44AB. But in A.Y.2012-13, the limit was Rs.60 lacs.
In Case of Profession
If gross receipts (A.Y. 2013-14, w.e.f. 1-4-2013 by Finance Act, 2012) of a profession is Rs. 25 lacs or more than that then Audit of books/accounts is mandatory u/s 44AB. But in A.Y.2012-13, the limit was Rs.15 lacs.
In Case of Truck Operators
Truck operators and person engaged in specified businesses declaring their income at an amount less than the amount computer under sections 44AE, 44BB or 44BB as the case may be,shall also, get their account audited u/s 44AB.
In Other Cases
Any assessee carrying on a business, declaring his income at an amount less than the amount computed under section 44AD and whose income exceed the basic exemption limit for the relevant previous year shall also get his accounts audited u/s 44AB.
Who will Audit Account?
In India, Chartered Accountant will audit the account and prepare the report as prescribed in Income Tax Act. They are qualified for accounts and having degree of Chartered Accountancy (CA) from ICAI. They charge fee for their service as prescribed by ICAI. Assessee can also authorize Chartered Accountant to file their income tax return on his behalf or file by himself. It is not mandatory to file income tax return by CA; Only audit report is mandatory. The audit report must be submit before the due dates. The due date from A.Y.2012-13 is 30th September w.e.f. 1-4-2012.
Audit Report Format:
3CA, 3CD – Accounts audited under any other law
3CB, 3CD – Accounts audited under I.T. act
Penalty on Failure to Get Audit Report
As it is mandatory and compulsory to get account audit if the asseesee falls in above conditions specified. Income Tax act has provision to levy penalty on failure to get account audit before due date i.e Rs.1,50,000 or 1/2% of gross receipt or turnover, whichever is less.