Under section 44AB of the Act, every person carrying on business is required to get his accounts audited, if his total sales, turnover, or gross receipts, in business exceed or exceeds one crore rupees in any previous year. In case of a person carrying on the profession, he is required to get his accounts audited, if his gross receipt in profession exceeds, fifty lakh rupees in any previous year.
In order to reduce the compliance burden on small and medium enterprises, the Finance Act 2020 has brought major amendments to the Income Tax Act, 1961 related to the applicability of the Tax Audit. It has increased the threshold limit for applicability of Tax Audit for a person carrying on business from one crore rupees to five crore rupees in cases where –
i) Aggregate of all receipts in cash during the previous year does not exceed five percent of such receipt; and
ii) Aggregate of all payments in cash during the previous year does not exceed five percent of such payment.
For more details, please refer to the attached document:- Tax Audit Applicability FY 2019-20
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