Step by Step TAX AUDIT PROCESS

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We are Sharing With You Step by Step TAX AUDIT PROCESS . So kindly Check Out our http://www.castudynotes.com website and ALL the Best for Your upcoming Exams.

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Step by Step TAX AUDIT PROCESS :



1.Determine applicability of tax audit:
*Business threshold- Turnover>1 Cr.(or 10 Cr. if cash transactions<5%)
*Profession threshold- Gross receipts>50 lakhs(or 75 lakhs if cash transactions<5%)

Sec.44AD(presumptive scheme)/44ADA/44AE- Special cases apply

2.Gather all required docs:
* Financial statements
* Ledger accounts
* Bank Statements
* TDS and GST returns
* Previous tax audit reports( if applicable)
* Loan details, cash transactions

3. Verify books of accounts:
* Check books are maintained as per section 44AA
* Bank reconciliation
* Stock records and valuation
* Verify TDS details with form 26AS
* Verify GST reconciliation with GST sheet prepared

4. Check disallowances:
* Disallow cash payments>10000
* Late PF payments
* Depreciation as per Co.’s Act
* Related party transactions

5. Ensure accounting policies (AS, Ind-AS) properly followed.

6. Prepare and file tax audit report
* Form 3CA: if audit already done under another law(e.g. Companies Act)
* Form 3CB: If no audit under any other law
* Form 3CD: Tax audit report (Annexure to 3CA/3CB)

7. Upload tax audit report on Income tax portal:
* Use Chartered Accountant’s login
* Upload Form 3CA/3CB + 3CD with Digital Signature
* Taxpayer must accept the audit report in their portal login.

Hope it’ll find helpful!

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