It is time for you to start preparing yourself for filing your tax returns for the financial year 2020-21. However not everyone knows if they are liable to get audited under 1 or many of the applicable tax or compliance laws in India.
One of the most commonly applicable audit laws in India for a company, firm or an individual are Statutory audit under companies act and Tax audit as per Income Tax Act. GST Audit which was applicable until FY 2019-20 has now been discontinued.
But what makes you liable for either of this Audit?
Let’s look a simple table to understand the reasons that would make you liable for an Audit :
Basis of difference
|Statutory AuditFor Companies||Statutory AuditFor LLP’s||Tax Audit|
|Applicability||Only for Companies||Only for LLP’s||All Legal Entities|
|Whom is it meant for||All Companies registered under Companies Act (ROC)||LLP’s whose turnover exceeds, in any financial year, forty lakh rupees, or whose contribution does not exceed twenty five lakh rupees||Any entity whose business has a turnover of more than Rs. 5 Crore the taxpayer’s and cash receipts of which are limited to 5% of the gross receipts or turnover, and if the taxpayer’s cash payments are limited to 5% of the aggregate payments.|
|Reason for conducting Audit||To check the whether all the disclosures and compliances have been made according to the Companies Act||To check the whether all the disclosures and compliances have been made according to the LLP Act||To verify if the income and expenses disclosed during the year have been calculated as per the Income Tax act.|
|Audit to be conducted by ?||Chartered Accountant||Chartered Accountant||Chartered Accountant|
|Report Submission||Shareholders||Shareholders||Income Tax Department|
|Nature of Audit||Mandatory||Conditional||Conditional|
|Due Date of Submitting Audit report*||31st October||31st October||30th September or 30th November|
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*Note: These are due dates provided as per the respective acts however due to COVID Government has brought extensions to the same.