TOPIC:- TAX AUDIT

A project submitted to
University of Mumbai for partial completion of the degree of
Bachelor in commerce (accounting and finance)
Under the Faculty of Commerce.
By
Yadav Sonali Sabhajeet Yadav
Under the Guidance of
Ms. Divya Mishra
Changu Kana Thakur Arts,Commerce and Science College.
INTRODUCTION
• Tax Audit is the public brand name of American tax firm Tax Resources, Inc.
• Tax Resources, Inc. was founded in 1988.
• The firm became the exclusive provider of Intuit Corporation’s TurboTax Audit Defense in 1999.
• TaxAudit is the largest audit defense firm in the country.
TYPES OF TAX AUDIT

1. Mail Audit
2. Office Audit
3. Field Audit
LIABILITY OF TAX AUDIT
• No liability
• Below the taxable limit
• Section 44AB
• Section 44AB is applicable to NRI also
SCOPE AND LIABILITY OF TAX AUDIT
• Income on presumptive basis
• Turnover in business
• Taxable limit
• Non residents deriving income
APPLICABILITY OF S.44AB – WHERE INCOME IS EXEMPT U/S 10

• Turnover or gross receipt or sales

• Guidance Note on tax audit
GROSS RECEIPTS

• “Gross Receipts” is not defined in the act

• In case of Share brokers
• Turnover or Gross receipts In case of shares, securities & derivatives
TAX AUDIT REPORT

• Form 3CA/3CB
• Form 3CD
• Annexure – I
• Annexure – II
CLAUSE :- 1 to 6
1. Name of the assessee
2. Address
3. Permanent Account Number
4. Status
5. Previous year ended
6. Assessment year
 PENALTY U/S 277 A
 Falsification of books of accounts or documents etc.,
1. He willfully and with intent to enable any other person……..
2. He makes or causes to be made………………….
3. He knows it to be false or dose not believe…………………
E- FILING OF RETURN
 Mandatory for firms
 Rule 12 of I.T Rules, 1962
 Notification on. 37/2011 dt. 1-7-2011
TAX AUDIT PROCEDURES
1. True and fare
2. True and correct
3. Audit Tests
5. Materiality
TYPES OF TAX AUDIT REPORT
Audit report is of two types: -
1. Unqualified opinion
2. Qualified opinion:-
A) Disclaimer
B) Adverse:
ELIGIBILITY, APPOINTMENT & REMOVAL
• Eligibility
• Appointment
• Removal
ADVANTAGES OF AUDITING
• Detection and prevention of errors and frauds:
• Advice on system, taxation, finance:
• Tally with books:
• Assurance of true and fair accounts:
LIMITATIONS OF AUDITING

• Can not check each and every transaction

• Audit evidence is not conclusive
• Auditor cannot discover deeply
• Audit cannot assure the users
THANK YOU