Tax is conducted to achieve the following objectives:

• Ensure proper maintenance and correctness of books of accounts and certification of the same by a tax or.
• Reporting observations/discrepancies noted by tax or after a methodical examination of the books of account.
• To report prescribed information such as tax depreciation, compliance of various provisions of income tax law etc.

All these enable tax authorities in verifying the correctness of income tax returns filed by the taxpayer. Calculation and verification of total income, claim for deductions etc. also becomes easier.

Who is mandatorily subject to tax ?

Following categories of taxpayers are required to get tax done:

Business

Category of person

• Carrying on business (not opting for presumptive taxation scheme*)
• Carrying on business eligible for presumptive taxation under Section 44AE, 44BB or 44BBB
• Carrying on business eligible for presumptive taxation under Section 44AD.
• Carrying on the business and is not eligible to claim presumptive taxation under Section 44AD due to opting out for presumptive taxation in any one financial year of the lock-in period i.e. 5 consecutive years from when the presumptive tax scheme was opted.
• Carrying on business which is declaring profits as per presumptive taxation scheme under Section 44AD.

Threshold

• Total sales, turnover or gross receipts exceed Rs 1 crore in the FY.
• Claims profits or gains lower than the prescribed limit under presumptive taxation scheme.
• Declares taxable income below the limits prescribed under the presumptive tax scheme and has income exceeding the basic threshold limit.
• If income exceeds the maximum amount not chargeable to tax in the subsequent 5 consecutive tax years from the financial year when the presumptive taxation was not opted for.
• If the total sales, turnover or gross receipts does not exceed Rs 2 crore in the financial year, then tax will not apply to such businesses./li>

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Profession

Category of person

• Carrying on profession.
• Carrying on the profession eligible for presumptive taxation under Section 44ADA.

Threshold

• Total gross receipts exceed Rs 50 lakh in the FY.
• 1. Claims profits or gains lower than the prescribed limit under the presumptive taxation scheme
  2. Income exceeds the maximum amount not chargeable to income tax

Business loss

Category of person

• In case of loss from carrying on of business and not opting for presumptive taxation scheme.
• If taxpayer’s total income exceeds basic threshold limit but he has incurred a loss from carrying on a business (not opting for presumptive taxation scheme).
• Carrying on business (opting presumptive taxation scheme under section 44AD) and having a business loss but with income below basic threshold limit.
• Carrying on business (presumptive taxation scheme under section 44AD applicable) and having a business loss but with income exceeding basic threshold limit.

Threshold

• Total sales, turnover or gross receipts exceed Rs 1 crore.
• In case of loss from business when sales, turnover or gross receipts exceed 1 crore, the taxpayer is subject to tax under 44AB.
• Tax not applicable.
• Declares taxable income below the limits prescribed under the presumptive tax scheme and has income exceeding the basic threshold limit.

What happens if a person is required to get his accounts ed under any other law for eg. statutory of companies under company law provisions ?

In such cases, the taxpayer need not get his accounts ed again for income tax purposes. It is sufficient if accounts are ed under such other law before the due date of filing the return. The taxpayer can furnish this prescribed report under Income tax law.

What constitutes report?

Tax or shall furnish his report in a prescribed form which could be either Form 3CA or Form 3CB where:

• Form No. 3CA is furnished when a person carrying on business or profession is already mandated to get his accounts ed under any other law.
• Form No. 3CB is furnished when a person carrying on business or profession is not required to get his accounts ed under any other law.

In case of either of the aforementioned reports, tax or must furnish the prescribed particulars in Form No. 3CD, which forms part of report.

How and when tax report shall be furnished?

The tax or shall furnish tax report online by using his login details in the capacity of ‘Chartered Accountant’. Taxpayer shall also add CA details in their login portal. Once the tax or uploads the report, same should either be accepted/rejected by taxpayer in their login portal. If rejected for any reason, all the procedures need to be followed again till the report is accepted by the taxpayer.

You must file the tax report on or before the due date of filing the return of income. It is 30 November of the subsequent year in case the taxpayer has entered into an international transaction and 30 September of the subsequent year for other taxpayers.

Penalty of non filing or delay in filing tax report

If any taxpayer who is required to get the tax done but fails to do so, the least of the following may be levied as a penalty:

• 0.5% of the total sales, turnover or gross receipts.
• Rs 1,50,000.