Income Tax: CBDT Extends Deadline for Audit Report to October 7, Know Penalty on Missing Due Date

The income tax department has extended the deadline for filing of various audit reports for the assessment year 2023-24 to October 7, 2024. The original deadline was September 30.

According to tax experts, the deadline extension is applicable to all taxpayers, including individuals and companies, whose income tax deadline is October 31, 2024.

Generally, the income tax deadline for salaried individuals or those who do not require audits is July 31, while that for audit-requiring individuals and companies is October 31 every year. The latter individuals and companies usually require submission of tax audit reports by September 30.

“Central Board of Direct Taxes (CBDT) has decided to extend the specified date for filing of various reports of audit for the Previous Year 2023-24, which was 30th September, 2024 in the case of assessees referred in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act, to 07thOctober 2024,” the CBDT said in a post on X on Sunday evening.

The deadline extension comes following reports of a slow e-filing portal.

The CBDT’s circular dated September 29, 2024, acknowledged these technical difficulties and invoked its authority under Section 119 of the Income Tax Act to extend the audit report submission date. Many experts welcomed the move, but also cautioned against complacency.

What is the Penalty of Not Filing Tax Audit Report?

In India, not filing a tax audit report by the due date can lead to penalties under Section 271B of the Income Tax Act. The penalty for not furnishing the tax audit report is generally:

0.5% of Turnover or Gross Receipts: The penalty is 0.5% of the total sales, turnover, or gross receipts of the business for the financial year.

Maximum Penalty: The penalty amount can go up to a maximum of Rs 1,50,000.

However, if the taxpayer can prove that there was a reasonable cause for not getting the accounts audited, the penalty may be waived off at the discretion of the assessing officer.

Who Needs to File Audit Report?

A tax audit report must be filed by certain categories of taxpayers in India, based on turnover, gross receipts, or specific conditions. Here are the major categories:

1. Business

Turnover Exceeds Rs 1 Crore: Businesses with turnover exceeding Rs 1 crore in a financial year are required to get their accounts audited.

Reduced Limit of Rs 10 Crore: The limit is increased to ₹10 crore if at least 95% of the transactions (both receipts and payments) are done digitally.

2. Professionals

Gross Receipts Exceed Rs 50 Lakh: Professionals like doctors, architects, lawyers, etc., whose gross receipts exceed ₹50 lakhs in a financial year are required to file a tax audit report.

3. Presumptive Taxation Scheme

Section 44AD (Businesses): Taxpayers who opted for the presumptive taxation scheme under Section 44AD but declare profits lower than 8% (or 6% in case of digital receipts) of turnover, and if their total income exceeds the basic exemption limit.

Section 44ADA (Professionals): Professionals under the presumptive scheme (Section 44ADA) who declare profits lower than 50% of gross receipts and whose income exceeds the basic exemption limit.

Section 44AE (Transporters): Transporters opting out of presumptive taxation with lower income declarations may also need an audit if they exceed income thresholds.

4. Other Specific Conditions

If there are losses to be carried forward and the taxpayer wants to offset these losses, a tax audit might be needed.

If a taxpayer is covered under Section 44AB, which includes those not covered under the above schemes but meeting specific criteria based on income, turnover, or professional receipts.