Tax Audits Under Income Tax Act
Tax audits play a crucial role in ensuring financial transparency, accuracy, and compliance with the tax regulations prescribed by the Income Tax Act, 1961. At VPS & Associates, Hyderabad, we provide comprehensive tax audit services to businesses, professionals, and other entities to help them meet their statutory obligations while optimizing their tax positions.
A tax audit is an independent review of a taxpayer’s books of accounts, financial transactions, and tax filings to ensure compliance with the provisions of the Income Tax Act. It is mandatory for businesses and professionals exceeding specified turnover and income thresholds. As per Section 44AB of the Income Tax Act, tax audits must be conducted by a qualified Chartered Accountant and the audit report must be submitted within the prescribed time frame to avoid penalties.
Who Needs a Tax Audit?
A tax audit is required in the following cases:
- Businesses: If the total sales, turnover, or gross receipts exceed ₹1 crore in a financial year. However, for businesses opting for presumptive taxation under Section 44AD, a tax audit is required if turnover exceeds ₹2 crore or if the declared profit is lower than the prescribed rate.
- Professionals: If the gross receipts in a profession exceed ₹50 lakh in a financial year.
- Businesses and Professionals Not Opting for Presumptive Taxation: Even if the turnover is below the prescribed limits, a tax audit is required if profits are lower than the deemed profit percentage and the taxpayer’s total income exceeds the basic exemption limit.
- Entities Claiming Exemptions/Deductions: Certain businesses and professionals claiming tax exemptions or deductions under various sections of the Income Tax Act may also require a tax audit.
Why is a Tax Audit Important?
A tax audit ensures:
✔ Accuracy in Financial Reporting – Identifying discrepancies in income reporting and financial statements.
✔ Compliance with Tax Laws – Meeting the regulatory requirements and avoiding non-compliance issues.
✔ Avoidance of Penalties – Ensuring timely tax audit filings to prevent penalties under Section 271B.
✔ Better Financial Planning – Helping businesses strategize and optimize their tax liabilities efficiently.
✔ Increased Credibility – Enhancing financial transparency and reliability for stakeholders, investors, and lenders.
Our Expertise in Tax Audits
With over 30 years of experience, VPS & Associates, Hyderabad, specializes in conducting tax audits for:
✅ Corporates and Private Limited Companies
✅ Partnership Firms and LLPs
✅ Sole Proprietorships
✅ Professionals (Doctors, Lawyers, Consultants, etc.)
✅ Startups and MSMEs
✅ Trusts, Societies, and NGOs
✅ Businesses with International Transactions
Our team of experienced Chartered Accountants and tax experts provides end-to-end support in tax audits, helping clients meet statutory requirements while ensuring financial efficiency.
Why Choose VPS & Associates, Hyderabad?
✔ Experienced Professionals – Decades of expertise in tax laws and audit procedures.
✔ Industry-Specific Solutions – Customized tax audit services tailored to different business sectors.
✔ Seamless Audit Process – Hassle-free documentation and compliance support.
✔ Timely Filing & Compliance – Avoiding penalties by ensuring timely tax audit submissions.
✔ Confidentiality & Accuracy – Maintaining the highest level of financial integrity and security.
