Tax Audit under 44ab Income Tax Act

Applicability: to persons (individuals, firms or companies) whose turnover during the financial year exceeds limits specified i.e.

1. For persons carrying on business Rs. 1 Crore or 10 Million
2. For persons carrying on profession Rs. 25 Lakhs 2.5 Million

Purpose: As India follows self-assessment method to assess income and taxes payable by a person, it is the responsibility of the person to follow all the rules prescribed under the Act. Tax Audit Service is a mechanism by which the Income Tax department would enforce the law effectively through an independent agency by ensuring that income declared in the return is accurate