The deadline for submitting the income tax audit report has been extended to October 7, 2024, for taxpayers required by law to conduct an income tax audit and submit their audit reports by September 30, 2024. The reports must be filed online via the e-filing ITR portal. This extension is crucial, as missing the deadline could result in a penalty of ₹1.5 lakh or 0.5% of total sales, whichever is lower.
The original deadline of September 30, 2024, has now been pushed to October 7, 2024. This extension comes in response to challenges faced by taxpayers and stakeholders in submitting reports electronically under the Income Tax Act.
“Central Board of Direct Taxes (CBDT) has decided to extend the specified date for filing of various reports of audit for the Previous Year 2023-24, which was 30th September, 2024 in the case of assessees referred in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act, to 07thOctober 2024,” said the Income Tax Department in a circular released on September 29, 2024.
Typically, the income tax filing deadline for salaried individuals and those not requiring an audit is July 31 each year. For individuals and companies that need a tax audit, the deadline is October 31, with tax audit reports usually due by September 30.
Why was the tax audit report submission deadline extended?
In the circular dated September 29, 2024 CBDT has said: “On consideration of difficulties faced by the taxpayers and other stakeholders in electronic filing of various reports of audit under the provisions of the Income-tax Act,1961 (Act), the Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119 of the Act, extends the specified date of furnishing of report of audit…..”
Penalty for Not Filing a Tax Audit Report:
Under Section 271B of the Income Tax Act, failing to file the tax audit report by the due date can result in penalties. The penalty for non-compliance is as follows:
- 0.5% of Turnover or Gross Receipts: The penalty is calculated at 0.5% of the business’s total sales, turnover, or gross receipts for the financial year.
- Maximum Penalty: The penalty amount can reach up to ₹1,50,000.
However, if the taxpayer can demonstrate a reasonable cause for not submitting the audit report on time, the assessing officer has the discretion to waive the penalty.
Who Needs to File a Tax Audit Report?
In India, certain taxpayers are required to file a tax audit report based on their turnover, gross receipts, or specific conditions. Here are the key categories:
- Business Owners:
- Turnover Exceeds ₹1 Crore: Businesses with a turnover exceeding ₹1 crore in a financial year are required to have their accounts audited.
- ₹10 Crore Limit for Digital Transactions: The turnover limit increases to ₹10 crore if at least 95% of the business’s transactions (receipts and payments) are conducted digitally.
- Professionals:
- Gross Receipts Exceed ₹50 Lakh: Professionals like doctors, lawyers, and architects who earn gross receipts exceeding ₹50 lakh in a financial year must file a tax audit report.
- Presumptive Taxation Scheme:
- Section 44AD (Businesses): Businesses opting for the presumptive taxation scheme under Section 44AD must file an audit if they declare profits lower than 8% (or 6% for digital transactions) of their turnover, and their total income exceeds the basic exemption limit.
- Section 44ADA (Professionals): Professionals under the presumptive scheme who declare profits below 50% of their gross receipts and have income exceeding the basic exemption limit are required to file an audit.
- Section 44AE (Transporters): Transporters who declare lower income than allowed under the presumptive scheme and exceed income thresholds also need an audit.
- Other Conditions:
- Losses Carried Forward: If a taxpayer wishes to carry forward losses and offset them in future years, a tax audit may be required.
- Section 44AB: Taxpayers not covered by the above schemes but meeting certain criteria based on income, turnover, or professional receipts must file a tax audit report.
This ensures compliance with the Income Tax Act for businesses and professionals based on their financial thresholds.