Income tax audit report deadline extended to Oct 7: What you need to know

This extension provides taxpayers, including individuals and companies, additional time to meet their compliance obligations

The income tax department has extended the deadline for submitting various audit reports for the assessment year 2023-24 to October 7, 2024. The original deadline was September 30, allowing taxpayers additional time to fulfil their compliance obligations.

Tax experts confirmed that this extension applies to all taxpayers, including individuals and companies, whose income tax filing deadline is set for October 31, 2024.

For salaried individuals or taxpayers not requiring an audit, the income tax deadline generally remains July 31. However, individuals and companies requiring audits face an October 31 deadline, with a typical requirement to file tax audit reports by September 30.

The Central Board of Direct Taxes (CBDT) announced the extension in a post on X (formerly Twitter), stating, "CBDT has decided to extend the specified date for filing various reports of audit for the previous year 2023-24, originally set for September 30, 2024, to October 7, 2024." This decision affects assessees referred to in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Income Tax Act.

 

The extension was made in response to technical issues reported on the e-filing portal. In a circular dated September 29, 2024, the CBDT acknowledged the slow functioning of the portal and exercised its powers under Section 119 of the Income Tax Act to extend the deadline. While many experts have welcomed the decision, they also cautioned taxpayers against complacency, urging them to file their reports well before the new deadline.

 

Penalties for missing the tax audit report deadline

Failure to file a tax audit report by the deadline can result in penalties under Section 271B of the Income Tax Act. Penalties typically include:

- 0.5 per cent of turnover or gross receipts: The penalty is 0.5 per cent of total sales, turnover, or gross receipts for the financial year.
 

- Maximum penalty: The penalty amount can go up to Rs 1.5 lakh.
 

However, penalties may be waived if the taxpayer can demonstrate reasonable cause for missing the deadline, at the discretion of the assessing officer.

 

Who needs to file a tax audit report?

Tax audit reports are mandatory for certain categories of taxpayers in India based on turnover, gross receipts, or other specific conditions. Key categories include:

Businesses:

- Turnover exceeds Rs 1 crore: Businesses with turnover over Rs 1 crore must undergo an audit.
 

- Digital transactions: The threshold is raised to Rs 10 crore if at least 95 per cent of transactions (receipts and payments) are conducted digitally.
 

Professionals:

- Gross receipts exceed Rs 50 lakh: Professionals such as doctors, architects, and lawyers with gross receipts exceeding Rs 50 lakh are required to file a tax audit report.
 

Presumptive Taxation Scheme:

- Section 44AD (Businesses): Taxpayers under Section 44AD who declare profits lower than 8 per cent (or 6 per cent for digital receipts) and whose total income exceeds the exemption limit.
 

- Section 44ADA (Professionals): Professionals under Section 44ADA who declare profits below 50 per cent of gross receipts and whose income exceeds the exemption limit.
 

- Section 44AE (Transporters): Transporters opting out of presumptive taxation may need an audit if they declare income below the specified threshold.
 

Other conditions:

- Taxpayers with losses they wish to carry forward.
 

- Taxpayers covered under Section 44AB, which includes those who do not fall under presumptive taxation schemes but meet specific criteria related to income, turnover, or professional receipts.