Tax Audit Applicability For LLP

LLP required to get its books of accounts audited by practicing Chartered Accountant if its turnover crosses limit for FY 2022-23 under business is Rs. 10 Cr with cash transaction limit and in case of Professional Services sales Rs. 50 lac. Tax audit is statutory obligation its been conducted by Chartered Accountant to check all prevision of Law follow , if any tax liability pending etc. Tax Audit is examination of LLP books of accounts , other applicable tax compliance , checking depreciation calculation etc. Its proper presentation of financial statement to Government authorities.  

• Audit Section is 44 AB of Income Tax Act 1961
• Appoint CA firm for Tax Audit
• Due Date of Tax Audit Filing is 30 September 
• Due Date of Income Tax Filing 30 September
• For Non Filing Penalty upto Rs.150000/-
• Digital Signature is mandatory

Objective of LLP Tax Audit

• Ensure correct books of account maintained by LLP
• Reporting of observations/discrepancies
• Tax audit is statutory obligation by Law
• It’s a health check of LLP to avoid further legal notices
• Reporting to Government department

Turnover Criteria for Audit of LLP

Business can be of two nature one is trading , manufacturing or retail sales of goods and other is providing services business. Under Section 44AB of the Income Tax Act 1961 , Turnover Criteria for Audit of LLP is defined as per nature of sales where is sales of goods or sales of Professional services.

LLP Tax Audit Due Date for FY 2021-22

Under section 44AB of the Act every LLP carrying on business is required to get his accounts audited if turnover crosses above limit. LLP Tax Audit due date for FY 2021-22 is 30 September 2022. For AY 2022-23 LLP tax audit due date is 30 September 2022.

LLP Tax Audit Penalty FY 2022-23

Under Income Tax Act 1961 section 271 B is levied for tax audit penalty. If any LLP where Tax Audit is applicable fails to conduct tax audit The penalty shall be lower of the following amounts:

1. 0.5% of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such year or years.
2. Rs. 1,50,000.

However, Section 273B tax audit can be filed audit due. There is no penalty shall be levied under section 271B if firm proves there is a reasonable cause of such no filing, which causes are accept by Tribunals/Courts as reasonable Cause are:

1. Resignation of the Tax Auditor and Consequent Delay
2. Death or physical inability of the partner in charge of the Accounts
3. Labor Problems such as strikes, lock-outs for a long period
4. Loss of Accounts because of Fire/Theft etc. beyond the control of the Assesses
5. Natural Calamities

DSC For Tax Audit Filing

Under Tax audit , Chartered Accountant prepare audit report in Form 3CA/3CB and 3CD. These audit reported need to be filed online at Income tax Site. For filing of Tax audit report of LLP , Digital Signature of authorized partner is required. Due to online filing of audit report digital signature is mandatory.