The Income Tax Department has extended the deadline for filing various audit reports for the assessment year (AY) 2023-24. The original deadline, set for September 30, 2024, has now been pushed to October 7, 2024. This extension applies to all taxpayers, including individuals and companies whose final income tax deadline is October 31, 2024.
Reasons for Deadline Extension
According to tax experts, this extension is particularly beneficial for taxpayers requiring audit reports. Typically, salaried individuals who do not require audits must file their tax returns by July 31. However, individuals and companies requiring audits have until October 31 to submit their income tax returns, with the audit report submission initially due by September 30.
The Central Board of Direct Taxes (CBDT) extended the deadline to October 7 due to technical issues faced on the e-filing portal. In a circular dated September 29, 2024, the CBDT invoked its authority under Section 119 of the Income Tax Act to ensure all taxpayers can submit their audit reports without complications.
Penalties for Missing Tax Audit Report Filing Deadline
Failure to file a tax report on time may lead to penalties under Section 271B of the Income Tax Act. The penalties include:
- 0.5% of Turnover/Gross Receipts: The penalty can amount to 0.5% of total sales or receipts for the financial year.
- Maximum Penalty: The total penalty can reach up to ₹1,50,000.
However, if the taxpayer can provide a valid reason for missing the deadline, the penalty may be waived at the discretion of the assessing officer.
Who Needs to File a Tax Audit Report?
Certain categories of taxpayers in India are required to file tax audit reports based on their turnover, gross receipts, or specific conditions:
- Business Owners:
- Turnover Over ₹1 Crore: Businesses exceeding ₹1 crore in turnover need to file an audit report.
- Digital Transactions (Turnover Over ₹10 Crore): For businesses with at least 95% digital transactions, the turnover limit rises to ₹10 crore.
- Professionals:
- Gross Receipts Over ₹50 Lakh: Professionals such as doctors, lawyers, and architects must file a tax audit report if their gross receipts exceed ₹50 lakh.
- Presumptive Taxation:
- Section 44AD (Businesses): Businesses declaring profits lower than 8% (or 6% for digital transactions) under the presumptive taxation scheme must file an audit if their income exceeds the basic exemption limit.
- Section 44ADA (Professionals): Professionals declaring less than 50% of gross receipts and exceeding the income threshold must file an audit.
- Section 44AE (Transporters): Transporters opting out of presumptive taxation and declaring lower income also require an audit.
- Other Specific Conditions: Taxpayers with losses to carry forward or meeting criteria under Section 44AB must file a tax audit report.
This extension provides taxpayers with extra time to comply with audit regulations and avoid penalties. However, tax experts advise not to delay as e-filing issues may persist.
