Home > Income Tax > Help Center > Tax Audit criteria, applicability & Calculator Last Updated: Apr 15th 2023
Find Income Tax Audit applicability as an individual, business or a Company. Know more on tax audit criteria and applicability. Tax Audit Calculator ask basic questions, help you in revenue calculation for a stock market trader, business and give you the result. Considers factors like taxpayer type, entity type (Individual, Business, Firm, or Company, turnover, financial year, carry forward losses etc.
In case of futures & options trading covering brokers like Zerodha, ShareKhan, Upstox, Paytm, Groww, ICICI Direct, SBI Cap, 5paisa, Finavsia, Fyers, Angel One, Reliance, Alice Blue. Updated per latest Budget 2023
Trading in stock markets turnover: You have traded F&Os, derivatives, and/or intraday trading
Business turnover: You have earned business income and sale of assets and/or other non-sale revenue
Professional turnover: You have received professional income from the services you have rendered
Revenue: Business earning money from sales of its goods or services.
Turnover: Business earning money from sales of its goods or services AND sale of non-business activity such as accounts receivable, changes to portfolio, sale of scrap, income from other non-business assets, sometimes sale of an asset, revision in inventory etc.
Note: Generally.. both the terms 'turnover' and 'revenue' are often used interchangeably.
Importance of Turnover: In case of trading in stock markets, turnover is the parameter that defines who should go through income tax audit
Section 44AB under Income Tax Act 1961 mandates an audit of books of accounts by a chartered accountant in practice in the following scenarios.
U/s 271B: If a tax audit was not conducted and reported in time, the penalty would be 0.5% of the turnover for a maximum of Rs. 1.5 Lakhs
U/s 271B: Penalty would be waived off in case there is a reasonable cause, such as
Business: includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture.
Profession: includes jobs that require intellectual skills or manual skills supported by intellectual skills. Some of the disciplines include Medical, Engineering, Legal, Accountancy, Art, Acting, Architectural, Interior designing, Company Secretarial, Other Technical.
The process generally takes around 5-10 business days, below is the list of high level activities
It's not required to go through a Tax Audit next year, unless such person met the criteria for tax audit again as per section 44AB. Rules for Companies and co-operative societies follow different rules.
An individual or a company going through tax audit u/s 44AB should get the accounts audited on or before 30th Sep 2023 for FY 2022-23. Check the EZTax.in Tax Calendar for the latest update.
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