Reetu | Sep 4, 2023 |
ICAI released revised Guidance Note on Tax Audit under Section 44AB of Income Tax Act 1961
The Institute of Chartered Accountants of India (ICAI) has released a revised Guidance Note on Tax Audit under Section 44AB of Income Tax Act 1961.
In an ever-evolving landscape of taxation, where accuracy, compliance, and transparency are paramount, this Guidance Note stands as a beacon of knowledge and insight for all Chartered Accountants engaged in the intricate world of tax audit.
Tax audit, an essential tool in ensuring adherence to tax laws and regulations, demands a profound understanding of intricate legal framework, attention to detail and commitment towards ethical practice. To enable our members to perform tax audits efficiently, the Direct Taxes Committee of the Institute of Chartered Accountants of India (ICAI) has taken an initiative of updating the ‘Guidance Note on Tax Audit under section 44AB of the Income-tax Act, 1961’. This Guidance Note provides a comprehensive roadmap to navigate the complexities of tax audit in a strategic and informed manner and also delves into the intricacies of audit procedures.
As the regulatory environment evolves, it is imperative for our members to stay updated and compliant with the ever-changing tax requirements. This Guidance Note not only delves into the core concepts of tax audit but also provides practical insights that will aid taxpayers in ensuring adherence to the statutory norms.
Section 44AB has been introduced in the Income-tax Act, 1961, by the Finance Act, 1984. This section provides for audit of accounts of assessees having total sales, turnover or gross receipts exceeding the specified limits of Rs.40 lakhs for business and Rs.10 lakhs for profession. New Rule 6G, inserted in the Income-tax Rules, prescribes the Forms of Audit report for the above purpose. The requirements for the above audit will apply to accounts relating to previous year relevant to assessment year 1985-86 and subsequent years.
Audit of accounts in the corporate sector has been made compulsory by legislation over a period of years. Realising the importance of audit, in recent years, this requirement is being extended to non-corporate sector also.
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