Tax Audit Limit AY 2022-23 (Business & Profession) Updated

Tax Audit Limit A.Y. 2022-23: In this article, we will discuss compulsory tax audit of accounts for A.Y.2022-23 (F.Y.2021-22 from 01-04-2021 to 31-03-2022)., You can find here the tax audit limits for businesses, and tax audit limits for professionals (like doctors, accountants, architects etc. for the assessment year 2022-23. It covers all the amendments related to the finance act 2021 and finance act 2022.

Tax Audit Limit for Business A.Y. 2022-23

Business (Not opting for presumptive taxation scheme) u/s 44AB

 

If the following condition is satisfied, a compulsory audit is required only if total sales, turnover or gross receipts in business exceeds Rs.5 crore (A.Y. 2020-21) Rs.10 crore (for A.Y. 2021-22  & A.Y.2022-23 onward)

  1. The aggregate of all receipts/payments in cash during the previous year does not exceed 5% of such payment.
    Note:

Note: Payment/receipt by a cheque/draft, which is not account payee, shall be deemed to be payment/receipt in cash.

Business (opting for presumptive taxation scheme) under section 44AD

Non-Applicability of Section 44AB: 

(a) Person declaring income u/s 44AD & his turnover/gross receipts is up to 2 crore.

(b) Person deriving income of the nature referred to section 44AB (ship) & 44BBA (aircraft)

Persons Threshold
Carrying on business eligible for presumptive taxation under Section 44AD If such person claims that the profits and gains from the business are lower than the profits and gains computed in accordance with provisions of section 44AD(1) and if his income exceeds the maximum amount which is not chargeable to tax (Applicable from A.Y. 2011-12 to 2016-17)
Carrying on business covered under section 44AD(4) If a person carrying on business is covered by the provisions of section 44AD(4) and his income exceeds the maximum amount which is not chargeable to income tax in the previous year (applicable from the assessment year 2017-18)
A person covered u/s 44ADA If such a person claims that the profits and gains from the profession are lower than the profit and gain

computer in accordance with the provisions of section 44ADA and if his income exceeds the maximum amount which not chargeable to -tax (applicable from the assessment year 2017-18)

Tax Audit Limit for Profession A.Y. 2022-23

Audit Limit for Professionals (A.Y. 2022-23): The persons who are carrying on profession shall if his gross receipts in profession exceed fifty lakh rupees in any previous year.

Turnover/Gross Receipt Limit for Previous Year Profit (in%) Is audit applicable? 
More than 50 Lakh Any Applicable
Up to 50 Lakh More than 50% N0
UPto 50 Lakh Less than 50% (sec 44ADA) Applicable

Notes for Audit Limit for Professionals: 

  • The provision to section 44AB that provides the enhanced turnover limit of Rs. 10 crores is placed under clause (a).
  • Therefore, the professionals are not entitled to claim an enhanced turnover limit of Rs. 10 crores.

Due Dates for Audit

Due Dates for Audit A.Y.2022-23: Here is the complete table of due dates for the audit report for a.y. 2023-23 along with form number.

Taxpayers Audit Form No. Statement Particulars Due Dates for Audit and Uploading Audit Report
In the case of a person covered under section 44AB (who gets his accounts audited) Form No. 3CB Form No.3CD One month prior to the due date of furnishing the income tax return.
  • A person covered by section 44AB should get his accounts audited and should obtain the audit report on or before 30th September of the relevant assessment year.
  • If not extended, the tax audit report for the financial year 2021-22 should be obtained by 30th September 2022. The due date to file an income tax return (Business requiring audit other than transfer pricing) is 31st October 2022.
  • A chartered accountant must electronically file the tax audit report with the Income Tax Department.
  • For more detail about due dates and to upload the audit report visit the official website of the income tax department. (i.e., at https://www.incometax.gov.in/iec/foportal).

Penalty for Not Getting Accounts Audited

In accordance with section 271B, an Assessing Officer may impose a penalty if a person who is required to comply with section 44AB fails to get his accounts audited in respect of any year or years. The penalty shall be lower of the following amounts:

(a) 0.5% of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in the profession, in such year or years.
(b) Rs. 1,50,000.

Nevertheless, if reasonable cause is proved, no penalty shall be imposed.

17 thoughts on “Tax Audit Limit AY 2022-23 (Business & Profession) Updated”

  1. Any spl. consideration for loss making Micro / Small Enterprise in industrial business with regard to Audit for above 2 Crores turnover during F Y 2021-22 ?

    Reply
    • For Business: If the total sales, turnover or gross receipt in business for the previous year exceeds Rs. 1 crore (Rs. 2 crore in case of person, who declares business profit in accordance with the provisions of section 44AD (1) then you are required to do tax audit your books of accounts from Chartered Accountant.

      For Profession: If the gross receipts in the profession for the previous year exceeds Rs. 50 Lakhs then you are required to do tax audit of your books of accounts from Chartered Accountants.

      Reply
  2. My turnover is 90 lakhs. Loss 12.5 lakhs, pension 4.56 lakhs — 1.56750 Vi deduction =2.99 lakh(Sr citizen). Whether 44AB audit required?

    Reply
  3. I HAVE A TURNOVER OF Rs. 64 LAKHS
    PROFIT OF RS. 85000 APPROX AND COMMISSION RS. 200000 SHOULD MY
    ACCOUNTS BE AUDITED?

    Reply
    • Sir your frequently raised questions do not show the reply. It would help a lot of people if the reply is seen, since we have similar question

      Reply
  4. Sir I filed ITR-4 and fill income in “No Account Case” Column. The Profit was 5 percent filed by me in ITR. Now I have a notice that it is a defective return please file B/s & P&L. Sir I want to know will i get penalety of audit, if i filed B/s & P&L. I filed gross receipt 63 lacs & profit is 3.38 lacs.

    Reply
  5. For, stock market speculater
    Buy sell of stocks value through out year
    Or turnover of fund (cheques)? Calculated

    Reply

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