The Goods and Services Tax (GST) has transformed India’s indirect taxation system by consolidating multiple taxes into a single tax. For entrepreneurs, startups, and growing businesses, obtaining a New GST Registration is not just a legal requirement but also a step toward building credibility and expanding opportunities. If you are planning to register your business under GST in India, this guide will help you understand the Importance of Tax Audit, the process, and its benefits.
Conducted by a Chartered Accountant, a tax audit helps in detecting discrepancies, avoiding penalties, and maintaining financial discipline.
Who Needs a Tax Audit?
Tax Audit requirements depend on turnover, receipts, or profits. Businesses and professionals falling into the following categories must undergo tax audit:
- Tax audit is applicable to businesses with annual turnover above ₹1 crore, or ₹10 crores if cash receipts and payments are limited to 5%
- Professionals with gross receipts above ₹50 lakhs.
- Persons declaring income under Section 44AD/44ADA but not complying with presumptive taxation norms.
Objectives of a Tax Audit
- Ensure Accuracy – Verify correctness of income and deductions reported.
- Detect Fraud or Errors – Identify misstatements or irregularities in accounts.
- Simplify Compliance – Stay aligned with tax regulations and reporting requirements effortlessly.
- Assist in Assessments – Simplifies the income tax department’s assessment process.
- Avoid Penalties – Filing accurate returns reduces chances of penalties and scrutiny.
Documents Required for Tax Audit
- Financial statements (Profit & Loss, Balance Sheet).
- Purchase and sales invoices.
- Books of accounts (Cash Book, Ledger, Journals).
- Bank statements.
- Previous year’s tax returns and audit reports.
Benefits of Tax Audit
- Enhanced credibility of financial statements.
- Prevents tax evasion and reduces legal risks.
- Helps in better financial planning.
- Strengthens trust with banks, investors, and stakeholders.
Why Choose Accounts2Arun for Tax Audit?
At Accounts2Arun, Mohali, we provide professional tax audit services that ensure compliance, transparency, and peace of mind. Our team of Chartered Accountants goes beyond just auditing – we help you identify opportunities for tax savings and guide you in efficient financial management.
Conclusion
A Tax Audit is not just a regulatory requirement but also a financial health check for your business. With the right guidance and expertise, businesses can not only stay compliant but also improve financial performance. Connect with Accounts2Arun, Mohali for expert tax audit services that safeguard your business and keep you ahead.