Section 271B - Income Tax Act
Section 271B of the Income Tax Act imposes a penalty on taxpayers for failing to get their accounts audited or failing to submit the required tax audit report to the Income Tax Department. This penalty is applicable when the taxpayer does not provide a reasonable explanation for not complying with the provisions under Section 44AB of the Income Tax Act.
Key Provisions of Section 271B
As per Section 271B:
Failure to Get Accounts Audited: If a taxpayer fails to get their accounts audited for any assessment year or previous year as required under Section 44AB, and they are unable to provide a reasonable cause for the default, the Income Tax Officer (ITO) may impose a penalty.
Penalty Amount: The penalty is calculated as 0.5% of the total sales, turnover, or gross receipts (whichever is applicable to the taxpayer’s business or profession) during the relevant previous year. The penalty is capped at a maximum of Rs. 1,50,000, whichever is lower.
Penalty Under Section 271B
The penalty under Section 271B is applicable when a taxpayer fails to get their accounts audited as per Section 44AB or fails to furnish the tax audit report. The penalty can be calculated as:
0.5% of total sales/turnover/gross receipts, or
Rs. 1,50,000, whichever is lesser.
Due Date for Filing Tax Audit Report
Taxpayers who are required to get their accounts audited must file their Income Tax Returns (ITR) by 30th September of each assessment year. The following ITR forms are subject to tax audit:
ITR-2, ITR-3, ITR-5, and ITR-6.
Tax Audit Limits
The tax audit requirement is based on the annual turnover or gross receipts:
Proprietorship & Partnership Firms: Tax audit is mandatory for those involved in a profession with gross receipts exceeding Rs. 50 lakhs.
Business Firms: Tax audit is mandatory for proprietorship firms with sales turnover exceeding Rs. 2 crores.
Limited Liability Partnerships (LLPs): LLPs with annual turnover exceeding Rs. 40 lakhs or a capital contribution above Rs. 25 lakhs are required to undergo a tax audit by a Chartered Accountant.
Companies: All companies, including private limited and one-person companies, must conduct a tax audit each year, regardless of turnover or capital.
Conclusion
Taxpayers should ensure compliance with the tax audit requirements to avoid penalties under Section 271B. Keeping timely and accurate records, understanding the applicable tax audit limits, and filing tax returns by the stipulated deadline are essential steps for staying compliant with the Income Tax Act.
Section 271B - Income Tax Act
Section 271B of the Income Tax Act imposes a penalty on taxpayers for failing to get their accounts audited or failing to submit the required tax audit report to the Income Tax Department. This penalty is applicable when the taxpayer does not provide a reasonable explanation for not complying with the provisions under Section 44AB of the Income Tax Act.
Key Provisions of Section 271B
As per Section 271B:
Failure to Get Accounts Audited: If a taxpayer fails to get their accounts audited for any assessment year or previous year as required under Section 44AB, and they are unable to provide a reasonable cause for the default, the Income Tax Officer (ITO) may impose a penalty.
Penalty Amount: The penalty is calculated as 0.5% of the total sales, turnover, or gross receipts (whichever is applicable to the taxpayer’s business or profession) during the relevant previous year. The penalty is capped at a maximum of Rs. 1,50,000, whichever is lower.
Penalty Under Section 271B
The penalty under Section 271B is applicable when a taxpayer fails to get their accounts audited as per Section 44AB or fails to furnish the tax audit report. The penalty can be calculated as:
0.5% of total sales/turnover/gross receipts, or
Rs. 1,50,000, whichever is lesser.
Due Date for Filing Tax Audit Report
Taxpayers who are required to get their accounts audited must file their Income Tax Returns (ITR) by 30th September of each assessment year. The following ITR forms are subject to tax audit:
ITR-2, ITR-3, ITR-5, and ITR-6.
Tax Audit Limits
The tax audit requirement is based on the annual turnover or gross receipts:
Proprietorship & Partnership Firms: Tax audit is mandatory for those involved in a profession with gross receipts exceeding Rs. 50 lakhs.
Business Firms: Tax audit is mandatory for proprietorship firms with sales turnover exceeding Rs. 2 crores.
Limited Liability Partnerships (LLPs): LLPs with annual turnover exceeding Rs. 40 lakhs or a capital contribution above Rs. 25 lakhs are required to undergo a tax audit by a Chartered Accountant.
Companies: All companies, including private limited and one-person companies, must conduct a tax audit each year, regardless of turnover or capital.
Conclusion
Taxpayers should ensure compliance with the tax audit requirements to avoid penalties under Section 271B. Keeping timely and accurate records, understanding the applicable tax audit limits, and filing tax returns by the stipulated deadline are essential steps for staying compliant with the Income Tax Act.
Section 271B - Income Tax Act
Section 271B of the Income Tax Act imposes a penalty on taxpayers for failing to get their accounts audited or failing to submit the required tax audit report to the Income Tax Department. This penalty is applicable when the taxpayer does not provide a reasonable explanation for not complying with the provisions under Section 44AB of the Income Tax Act.
Key Provisions of Section 271B
As per Section 271B:
Failure to Get Accounts Audited: If a taxpayer fails to get their accounts audited for any assessment year or previous year as required under Section 44AB, and they are unable to provide a reasonable cause for the default, the Income Tax Officer (ITO) may impose a penalty.
Penalty Amount: The penalty is calculated as 0.5% of the total sales, turnover, or gross receipts (whichever is applicable to the taxpayer’s business or profession) during the relevant previous year. The penalty is capped at a maximum of Rs. 1,50,000, whichever is lower.
Penalty Under Section 271B
The penalty under Section 271B is applicable when a taxpayer fails to get their accounts audited as per Section 44AB or fails to furnish the tax audit report. The penalty can be calculated as:
0.5% of total sales/turnover/gross receipts, or
Rs. 1,50,000, whichever is lesser.
Due Date for Filing Tax Audit Report
Taxpayers who are required to get their accounts audited must file their Income Tax Returns (ITR) by 30th September of each assessment year. The following ITR forms are subject to tax audit:
ITR-2, ITR-3, ITR-5, and ITR-6.
Tax Audit Limits
The tax audit requirement is based on the annual turnover or gross receipts:
Proprietorship & Partnership Firms: Tax audit is mandatory for those involved in a profession with gross receipts exceeding Rs. 50 lakhs.
Business Firms: Tax audit is mandatory for proprietorship firms with sales turnover exceeding Rs. 2 crores.
Limited Liability Partnerships (LLPs): LLPs with annual turnover exceeding Rs. 40 lakhs or a capital contribution above Rs. 25 lakhs are required to undergo a tax audit by a Chartered Accountant.
Companies: All companies, including private limited and one-person companies, must conduct a tax audit each year, regardless of turnover or capital.
Conclusion
Taxpayers should ensure compliance with the tax audit requirements to avoid penalties under Section 271B. Keeping timely and accurate records, understanding the applicable tax audit limits, and filing tax returns by the stipulated deadline are essential steps for staying compliant with the Income Tax Act.
Failure to Get Accounts Audited: If a taxpayer fails to get their accounts audited for any assessment year or previous year as required under Section 44AB, and they are unable to provide a reasonable cause for the default, the Income Tax Officer (ITO) may impose a penalty.
Penalty Amount: The penalty is calculated as 0.5% of the total sales, turnover, or gross receipts (whichever is applicable to the taxpayer’s business or profession) during the relevant previous year. The penalty is capped at a maximum of Rs. 1,50,000, whichever is lower.
0.5% of total sales/turnover/gross receipts, or
Rs. 1,50,000, whichever is lesser.
ITR-2, ITR-3, ITR-5, and ITR-6.
Proprietorship & Partnership Firms: Tax audit is mandatory for those involved in a profession with gross receipts exceeding Rs. 50 lakhs.
Business Firms: Tax audit is mandatory for proprietorship firms with sales turnover exceeding Rs. 2 crores.
Limited Liability Partnerships (LLPs): LLPs with annual turnover exceeding Rs. 40 lakhs or a capital contribution above Rs. 25 lakhs are required to undergo a tax audit by a Chartered Accountant.
Companies: All companies, including private limited and one-person companies, must conduct a tax audit each year, regardless of turnover or capital.
