Understanding Tax Audit Requirements for Professionals and Businesses

Section 44AA Overview: Mandates certain professionals to maintain books of accounts. Applicable to specific professions if gross receipts exceed INR 1,50,000. Applicable Professions: Legal, Medical, Engineering, Architectural, Accountancy, and more. Gross receipts threshold: INR 1,50,000. Books of Accounts Required: Cashbook, Journal, Ledger, and copies of bills/receipts. Additional requirements for medical professionals.

Penalties for Non-Compliance: Failure to maintain books of accounts can lead to penalties. Penalties under Section 271A and Section 271B. Tax Audit under Section 44AB: Businesses: If turnover exceeds INR 1 crore. Professionals: If gross receipts exceed INR 50 lakhs.

Audit Report and Due Dates: Form 3CA/3CB with Form 3CD by September 30. November 30 for international or specified domestic transactions. Penalty for Failure to Conduct Audit: Penalty is 0.5% of total sales or INR 1,50,000, whichever is lower. Waivable if reasonable cause for non-compliance is shown.

Understanding and adhering to these provisions ensures proper tax compliance and minimizes the risk of penalties for professionals and businesses alike.