{"id":4726,"date":"2021-06-25T18:35:17","date_gmt":"2021-06-25T13:05:17","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=4726"},"modified":"2023-05-06T13:49:14","modified_gmt":"2023-05-06T08:19:14","slug":"tax-audit-for-businesses-applicability-filing-process-due-date","status":"publish","type":"post","link":"https:\/\/razorpay.com\/learn\/business-banking\/tax-audit-for-businesses-applicability-filing-process-due-date\/","title":{"rendered":"Tax Audit for Businesses: Applicability, Filing Process &#038; Due Date"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Tax audit is a process of verifying the cash flow, total income and deductions of businesses or individuals. It ensures that:\u00a0<\/span><\/p>\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Your financial records reflect your actual income<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Claims made for income tax deductions are accurate<\/span><\/li>\r\n<\/ul>\r\n<p><span style=\"font-weight: 400;\">It also verifies if the business or individual has complied with various income tax law requirements, such as deductions and filing income tax returns. Finally, the tax audit report is submitted with the income tax filing.<\/span><\/p>\r\n<p style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528ff0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/tax-payments\/?r=blog_cta_business_banking_tax_audit_for_businesses&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Explore RazorpayX!<\/a><\/p>\r\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d6e4a95da3f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d6e4a95da3f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/tax-audit-for-businesses-applicability-filing-process-due-date\/#What-is-a-tax-audit-report\" >What is a tax audit report?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/tax-audit-for-businesses-applicability-filing-process-due-date\/#Who-undergoes-a-tax-audit\" >Who undergoes a tax audit?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/tax-audit-for-businesses-applicability-filing-process-due-date\/#Process-to-file-a-tax-audit-report\" >Process to file a tax audit report<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/tax-audit-for-businesses-applicability-filing-process-due-date\/#What-is-the-due-date-for-filing-the-tax-audit-report\" >What is the due date for filing the tax audit report?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/learn\/business-banking\/tax-audit-for-businesses-applicability-filing-process-due-date\/#What-happens-if-you-fail-to-follow-tax-audit-provisions\" >What happens if you fail to follow tax audit provisions?<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What-is-a-tax-audit-report\"><\/span>What is a tax audit report?<span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n<p>A practising Chartered Accountant (CA) conducts the audit. The CA submits the report in the following format:<\/p>\r\n<ul>\r\n<li>Form 3CA: When a company is mandated to get their accounts audited under any law. This applies to businesses that get their accounts audited compulsorily under the Companies Act, 2013<\/li>\r\n<li>Form 3CB: When a company gets its accounts audited under Section 44AB of the Income Tax Act<\/li>\r\n<\/ul>\r\n<p>Furthermore, the CA must submit form 3CD, along with either of the forms applicable to a business mentioned above, as part of the audit report.<\/p>\r\n<h2><span class=\"ez-toc-section\" id=\"Who-undergoes-a-tax-audit\"><\/span><strong>Who undergoes a tax audit?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n<p>The Income Tax (IT) department conducts an audit on any business with:<\/p>\r\n<ul>\r\n<li>A turnover of more than INR 1 crore<\/li>\r\n<li>Gross receipts exceeding INR 50 lakh<\/li>\r\n<li>Profits lower than their actual income under section 44AE, 44BB or 44BBB<\/li>\r\n<li>Income determined on a presumptive basis under section 44AD <br \/><br \/>In 2020, the Union Budget proposed that Micro, Small, and Medium Enterprises (MSME) whose turnover is less than INR 5 crore will not undergo a tax audit. However, this rule applies to MSMEs that carry out less than 5% of their business transactions in cash.<\/li>\r\n<\/ul>\r\n<h2><span class=\"ez-toc-section\" id=\"Process-to-file-a-tax-audit-report\"><\/span>Process to file a tax audit report<span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n<p><span style=\"font-weight: 400;\">The procedure for filing a tax audit report is as follows:\u00a0<\/span><\/p>\r\n<ul>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The auditor is required to create an account on the <\/span><a href=\"https:\/\/www.incometax.gov.in\/iec\/foportal\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">e-filing site<\/span><\/a><span style=\"font-weight: 400;\"> by clicking on <\/span><b>\u2018Register\u2019<\/b><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Once the account is created, the auditor has to present the tax audit report online, using their official login credentials<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">After filling in all the information, such as PAN of the assessee, assessment year, etc., the auditor uploads the report<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Once the report is uploaded, it is reflected in the worklist of the auditee<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The auditee then would be required to log in to the e-filing portal, go to their worklist and <strong>&#8216;<\/strong><\/span><b>Accept\/Reject&#8217;<\/b><span style=\"font-weight: 400;\">\u00a0the report<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If the report is rejected by the auditee, the entire process has to be repeated until the auditee accepts the tax audit report<\/span><\/li>\r\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If the report is accepted by the auditee, it would be successfully submitted and the auditee will get an acknowledgement number<\/span><\/li>\r\n<li aria-level=\"1\"><span style=\"font-weight: 400;\">The procedure for filing a tax audit report ends here and no further action is required to be taken<\/span>\r\n<h2><span class=\"ez-toc-section\" id=\"What-is-the-due-date-for-filing-the-tax-audit-report\"><\/span><strong>What is the due date for filing the tax audit report?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n<span style=\"font-weight: 400;\">The audit report has to be filed <\/span><b>on or before the 30th of November<\/b><span style=\"font-weight: 400;\"> of the subsequent assessment year. This is for taxpayers who have engaged in an international transaction.\u00a0<\/span> <span style=\"font-weight: 400;\">For other taxpayers, the due date is the 30th of September of the subsequent assessment year.<\/span>\r\n<h2><span class=\"ez-toc-section\" id=\"What-happens-if-you-fail-to-follow-tax-audit-provisions\"><\/span><strong>What happens if you fail to follow tax audit provisions?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\r\n<span style=\"font-weight: 400;\">If you fail to follow tax audit provisions, a penalty of 0.5% of total sales not exceeding INR 150,000 can be levied.<\/span>\r\n<h3><strong>Over to you<\/strong><\/h3>\r\n<span style=\"font-weight: 400;\">We hope this article has helped you understand audits better.\u00a0<\/span> <span style=\"font-weight: 400;\">If you have ever been audited before, share with your fellow business leaders the lessons you&#8217;ve learnt in the comments below.<\/span><strong><br \/><br \/>Did you know?<\/strong> <a href=\"https:\/\/razorpay.com\/x\/line-of-credit\/?utm_source=Content+&amp;utm_medium=Learn&amp;utm_campaign=Tax+Audit+for+Businesses%3A+Applicability%2C+Filing+Process+%26+Due+Date\">Razorpay Line of Credit<\/a> solves your cash flow challenges by financing your business growth through quick short-term business loans. Never face a cash crunch again.<br \/><br \/><br \/>\r\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528ff0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/line-of-credit\/?utm_source=Content+&amp;utm_medium=Learn&amp;utm_campaign=Tax+Audit+for+Businesses%3A+Applicability%2C+Filing+Process+%26+Due+Date\" target=\"_blank\" rel=\"noopener noreferrer\">Get started now<\/a><\/div>\r\n<\/li>\r\n<\/ul>","protected":false},"excerpt":{"rendered":"<p>We know tax audit for businesses can be complicated. Here&#8217;s a simple guide we&#8217;ve put together to help you sail through, without any hassles.<\/p>\n","protected":false},"author":151156487,"featured_media":4727,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3437,3643],"tags":[3515,2680,3514,3516],"class_list":{"0":"post-4726","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking","8":"category-capital","9":"tag-business-loans","10":"tag-sme","11":"tag-tax-audit","12":"tag-tax-audit-for-businesses"},"_links":{"self":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/4726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/users\/151156487"}],"replies":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/comments?post=4726"}],"version-history":[{"count":15,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/4726\/revisions"}],"predecessor-version":[{"id":7635,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/4726\/revisions\/7635"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media\/4727"}],"wp:attachment":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media?parent=4726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/categories?post=4726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/tags?post=4726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}