Turnover Limit for Tax Audit

• For Business, if the turnover of gross receipts is more than Rs 1 crore in a financial year or Rs 10 crore (where cash transactions are not more than 5% of total transactions), then a tax audit is required.
• For Professionals, if the gross receipt from the profession is more than Rs 50 lakh in a financial year, then a tax audit is required.

Due Date to Get Accounts Audited

Under Section 44AB, a taxpayer should get audited and get the audit report on or before September 30th of the relevant assessment year. For Example, the tax Audit report for FY 2025-26 should be obtained before September 30, 2026. Taxpayers must follow this deadline to avoid legal troubles.

Penalty for Not Getting Accounts Audited

If a taxpayer does not get their accounts audited, then they will have to face a penalty. The penalty will be the lower of the following amounts:

• 0.5% of the total sales, turnover or gross receipts
• Rs 1,50,000.

However, if the reason for not getting your accounts audited is genuine and is valid, then the penalty shall not be levied. These reasons include:

• Natural Disaster
• Delay Due to Tax Auditor Resignation
• Loss of accounts due to uncontrollable events
• Death of the partner in charge of the accounts
• Illness or death of the person managing the account.

Tax Audit plays a key role in ensuring that the business or the professionals are declaring their income, expenses and other financial information correctly.