Income Tax Audit Deadline: Will It Be Extended?
Thank you for reading this post, don't forget to subscribe!The September 30 deadline for income tax audits is causing significant stress for businesses and tax professionals across India. While the Central Board of Direct Taxes (CBDT) has not yet announced an extension, there is a strong push from various professional bodies, including the Institute of Chartered Accountants of India (ICAI), to grant more time.
Why an extension is being demanded:
- Persistent Technical Issues: Tax professionals report facing continuous technical glitches on the income tax e-filing portal, which hampers the timely completion of filings.
- Increased Compliance Burden: New regulations and additional disclosure requirements in audit forms have increased the workload, consuming more time and resources for each audit.
- Late Release of Utilities: The belated release of essential forms and utilities has compressed the compliance window, leaving professionals with a very tight schedule to complete all necessary procedures.
- Overlap of Deadlines: The simultaneous need to handle Goods and Services Tax (GST) filings and other statutory returns, alongside the income tax audit, has created a perfect storm of pressure for tax practitioners.
As CA Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Pvt. Ltd., points out, a small percentage of audits have been completed so far this year, which is a clear indication of the compliance burden. A pragmatic extension would provide much-needed relief and prevent hurried, error-prone filings that could lead to penalties later.
What is a tax audit?
A tax audit is a mandated review of a business or professional’s financial records to ensure they comply with the Income Tax Act. It is a detailed verification process to confirm that all income, expenses, and deductions are accurately reported.
Who is required to get a tax audit?
A tax audit is mandatory for:
- Businesses with an annual turnover exceeding ₹1 crore (or ₹10 crore if cash transactions are less than 5%).
- Professionals with gross receipts over ₹50 lakhs.
- Taxpayers opting for presumptive taxation schemes under specific conditions.
Consequences of missing the deadline:
Failure to file a tax audit report by the due date can result in a penalty under Section 271B of the Income Tax Act. This penalty is 0.5% of the total sales, turnover, or gross receipts, up to a maximum of ₹1,50,000.
