So unfair in both amended for low taxable income people compared to middle and high taxable income. Section 44AB. Is such a case, it shall be sufficient if such person gets the accounts of such business or profession audited under such other law and obtains the report of the audit as required under such other law and also a report by the chartered accountant in the form prescribed under section 44AB, i.e., Form No. 2. Audit will not be applicable since the assessee can go for presumptive taxation scheme u/s 44AD. However, w.e.f. If profit is at least 50% of gross receipts of profession, then one can go for sec 44ADA nd avoid tax audit. In Present, if an assessee claims that his profits and gains from ‘eligible business’ are less than 8% or 6% or 50% of the total turnover or gross receipts [as the case may be as per Section 44AD and 44ADA] and whose total income exceeds the maximum amount not chargeable to tax, the assessee shall maintain the books of account as prescribed under Section 44AA of the IT Act [as per u/s 44AA(iv) or Section 44ADA(4) as the case may be] and get them audited under section 44AB … So in first possibility, he satisfy both condition of cash receipts and payments [ does not exceeds 5 % of such receipts and payments ] , he is not require to get his books of account audited under section 44 AB[a]  of the Income Tax Act, 1961. Section 44AB of the Income Tax Act deals with the audit of accounts of certain individuals. AY 2020-21 with the help of a chart as follows, (You may also want to read Sec 44AD AND 44ADA before going through the chart). Is the new amendment giving an option to assessee (who satisfy the conditions) to refrain from filing tax audit report? (b) in the case of a person who carries on business or profession, but not being a person referred to in clause ( a ), be in Form No. Explanation. Recently, we have discussed in detail section 44AA (maintenance of accounts by certain persons carrying on profession or business) of IT Act 1961. 23 of the Guidance Note[2005 Edition] Clause 17(h) of Form 3CD Para 35 of the Guidance Note (Subsequent changes have been made in section 40A(3) by the Finance Act, 2008 and Finance (No. In other words, if certain individuals meet the requisites as prescribed under Section 44AB, then these individuals will have to ensure that their accounts are audited by a certified Chartered Accountant. (b) aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed five per cent of the said payment, this clause shall have effect as if for the words “one crore rupees”, the words “five crore rupees” had been substituted; or, (b) carrying on profession shall, if his gross receipts in profession exceed fifty lakh rupees in any previous year; or, (c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AE or section 44BB or section 44BBB, as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year; or, (d) carrying on the profession shall, if the profits and gains from the profession are deemed to be the profits and gains of such person under section 44ADA and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his profession and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year; or. (The Text which is in bold has been added by Finance act, 2020   w.e.f. Now it is categorically mentioned in all these sections that the TDS/TCS will required to be deducted, if sales, gross receipts or turnover will exceed, the monetary limit specified in clause (a) or clause (b) of section 44AB of the Act Rupees One Crore in case of the business or Rupees Fifty Lac in case of the profession, as the case may be. Just Check up before Panicking, Extend Income Tax, Companies & CGST Act compliance due dates, Provisions for modifying PAN based IEC introduced, Companies (Compromises, Arrangements & Amalgamations) Second Amendment Rules, 2020, Disqualification, Striking off And Cancellation of DIN, Changes in GST Rules relating to Registration, ITC Returns and E Way Bills, Practical issues on ITC after Notification No. In Second possibility, as he does not satisfy two conditions of maximum 5 % of cash receipts and cash payments, then he has to get his books of audited as per provisions of sec 44 AB [a] of the Income Tax Act, 1961. Thus, For AY 20-21 the due date for filing tax audit report for FY 2019-20 corresponding to the assessment year 2020-21 will be 30th Sept, 2020 (one month prior to 31st Oct, 2020), (Recent update: On account of the Covid-19 situation , the government in a press conference dated May 13, 2020 announced that the income tax return (ITR) filing deadline for FY 2019-20 for all persons has been extended  from July 31, 2020 & October 31,2020, 2020 to November 30, 2020 and tax audit report due date  from September 30, 2020 to  October 31, 2020 ), Now we will understand all the provisions of Sec 44AB wef. Form No. Maintained by V2Technosys.com, Taxguru Consultancy & Online Publication LLP, 509, Swapna Siddhi, Akurli Road, Near Railway Station, Kandivali (East), Amendment in Section 44AB & applicability for AY 2020/21- Analysis, How to fill ITR 3 from Tax Audit Report – An Analysis, Income Tax TCS provision – Section 206C[1H] – wef 01/10/2020, Issues in Tax Audit – Difference in ITC in GSTR 2A & GSTR 3B, Conditions for claiming Income Tax deductions under chapter VIA, Bonafide switch from Percentage completion to Project completion method allowable, CIT cannot ask AO to look into issues not within the purview of limited scrutiny, Challenge to vires of Circulars & Constitutional Validity of Section 9(a)(ii) of Direct Tax Vivad se Vishwas Act, Due Dates as per Income Tax Act 1961 expiring on 31st December 2020? The provisions of Section 44AB have been amended by the Finance Act, 2020 giving rise to major confusion in the minds of businessmen and professionals alike. 3CD) on or before the ‘specified date’. Tax audit clause 44ab(d) or (e) This query is : Resolved Report Abuse Follow Query Ask a Query. Kindly confirm. a) In case of business, if turnover/gross receipt exceeds Rs. Thanks. 92/2020- CT to 94/2020- CT, Extend due dates for Income Tax Audit & Returns for AY 2020-21, Extend Tax Audit/ITR due dates for AY 2020-21, ICAI requests for extension of various Income-tax due dates, Extend Due Dates for Tax Audit and Income Tax Return Filing, Extend Income Tax Audit & ITR Due dates for AY 2020-21, Extend due dates of Audit Reports, ITRs, GST Returns, VSV Scheme, Extend due date for filing ITR & Tax Audit Report- AY 2020-21, Extend Tax/TP Audit & ITR Due dates for AY 2020-21, Open letter for extension of Due dates under Income Tax and GST, Gross receipts from profession in the financial year, Profits and gains (as a % of total Gross receipts), Total sales, turnover or gross receipts in the Financial year, Profits and gains (as a % of total sales, turnover or gross receipts). These provisions have effect from.AY 2020-21, A pensioner is getting more than 5 lakhs Rupees as salary income and getting 2 lakhs Rupees from profession (with 51% as expenditure). [ that above Rs. 2 crores. 3CB [See rule 6G(1)(b)] Audit report under section 44AB of the Income -tax Act 1961, in the case of a person referred to in clause (b) of sub - rule (1) of rule 6G 2) Up to AY 2019-20, a person covered by section 44AB should get his accounts audited and should furnish the audit report on or before the due date for furnishing the return of income u/s 139(1). Section 44AB of the Income Tax Act contains provisions pertaining to the tax audit under the Income Tax Audit. In order to submit a comment to this post, please write this code along with your comment: 748e6fecf2dae2ec32886f3bdf7bc508. A person is having commission business, 44AD not applicable to it, turnover is 80 Lakhs, and profit is 3 percent, Is audit applicable?? Clause 8: Indicate the Relevant Clause of section 44AB under which the audit has been conducted: Verify the applicability of clauses of sec. CLAUSE 8 : Indicate the relevant clause of section 44AB under which the audit has been conducted a. The two major amendments made by Finance Act, 2020 in respect of tax audit are as follows. Section 44AB has been introduced in the Income-tax Act, 1961, by the Finance Act, 1984. 17 [Audit of accounts of certain persons carrying on business or profession.. 18 44AB. 3CA - Audit report under section 44AB of the Income-tax Act, 1961, in a case where the accounts of the … 2 crore even then he is not required to conduct audit if he not falls in point (e) below. should make suitable amendments in the Income Tax Act, 1961 whrereever it is necessary. 5 crores in cases where the aggregate cash receipts AND aggregate cash payments made during the year does not exceed 5% of total receipt and total payment respectively. Is he liable for audit, sir. Difficult to Genuine Tax Payers, Discussion on GST Notification No. The only option left is to go for audit u/s 44AB(e) which again is a debatable topic. 1 Crore to Rs. 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