The Central Board of Direct Taxes (CBDT) has recently enabled the tax audit utility for taxpayers to file Tax Audit Reports (TARs) for the assessment year 2021-22.
Income tax rules require certain taxpayers to get their accounts audited as per section 44AB. The limit was Rs 1 crore for tax audit before but now it has been extended to Rs 5 crore from AY 2021-22 and to Rs 10 crore with effect from AY 2022-23, if the taxpayer’s cash receipts are limited to 5% of gross receipts or turnover, and if the taxpayer’s cash payment is limited to 5% of the total payment.
The auditor will have the responsibility to submit the audit report in the specified audit form along with the detailed description.
The tax auditor will also have to provide all the findings in a report using the specific ‘audit form’ directed by the Income Tax Department. Form 3CA and 3CB are prescribed in section 44AB. On top of these two forms, the auditor also has to submit a form 3CD, and the detail of these forms needs to be discussed in detail.
The audit report must be obtained before 30th September of the concerned assessment year apart from the extension of the date. Currently, the audit report for the AY 2021-22 can be submitted by 15th Jan 2022.
Also, the assessing officer can levy a penalty under section 271B in case the taxpayer misses on accounts audit of the audit report filing and the penalty in its minimum can be 0.5% of the complete sales, turnover, or the receipt gross and can be levied till INR 1,50,000. Still, the taxpayer can save himself from the penalty if he justifies the reason for missing the compliance.
Download Free Offline Utility for Filing Tax Audit Reports
Taxpayers can get solutions about downloading free government offline utility for filing tax audit reports in the assessment year 2021-2022. The CBDT department enabled utility on new ITR version 2.0 website for Forms 3CA-CD & 3CB-CD
Tax Experts’ Views About Audit Reports
“AMRG & Associates Director – Direct & International Tax Om Rajpurohit said after prolonged postponement, the CBDT has finally enabled the Tax Audit utility on October 26.”
“However, this delay has resulted in an unnecessary interest burden for the taxpayers who usually finalize their tax due and file their tax return on time once the tax audit report is filed. Though, for such a class of taxpayers who are yet to start their ITR filing process owing to extended due dates, this is a welcome step,” Rajpurohit added.
“AKM Global, Director-Tax and Regulatory, Sandeep Sehgal said since the due date for filing of tax audit stands extended to January 15, 2022, this will allow sufficient time to auditors and taxpayers to ensure orderly filing, and also identify and report any glitches encountered during the process.”
