Statutory Audit V/s Tax Audit

Audit of financial statement means examination of books of accounts and related documents with objective of provide assurance about true and fairness financial statement. Generally people get confused between Statutory Audit and Income Tax Audit. 

As the name indicate, Income tax audit is conduct  under income tax act,1961. Whereas Statutory Audit is conducted in accordance with respective registration Act. Company Act 2013 require to statutory audit of every company under the act. Commonly know as Company Audit.



The Key difference between Statutory Audit and Income Tax Audit are as under:

 

STATUTORY AUDIT

INCOME TAX AUDIT

Required Under

Company Act,2013 or any other previous company act

Income Tax Act,1961

Applicable on

Company

All whose turnover or gross limit exceed prescribe limit

Threshold Limit

Compulsory required ir-respective of receipt or turnover

     ·   For Business- if turnover exceed 1 crore

     ·    For Specified Profession if gross receipt exceeds 50lakh.

Who conduct

A statutory Auditor, being a practicing-chartered accountant

Practicing chartered accountant  

Purpose

To ensure that financial statement is prepared in accordance with applicable standard and provide true and fair view of company financial position

To ensure that assessee has declared his income and expenditure correctly in complying all provision of Income tax act.  

Report

Report is address to Member of company and submit to MCA .

Report is submit to income tax department.

Due date

Within 6m from end of financial year but before conduct of annual general meeting.

On or before 30sep of following the year of relevant previous year.

Penalty   

     ·   Company- Rs 25000-500,000

     ·   Officer- Rs 10000-100,000 or        

Imprisonment up to 1year or

both

 

Lower of

     ·     0.5% of turnover or receipt OR

     ·     Rs 150,000

 

After discuss all above point we can say that these two audits are completely different. Scope of statutory audit is much wider than income tax audit.

Comments

Post a Comment

Popular posts from this blog

MAXIMUM MARGINAL RATE (MMR)

Image
 Finance Act 2019 revised Surcharge rate for Individual, HUF, AOP/BOI. The rate is 10%, 15%, 25%, 37% depending on income and their sources. Further Finance Act 2020 provide optional new tax scheme for individual , HUF, AOP, BOI which provide new tax slab. This will also introduce confusion about now what is Maximum Marginal Rate.  WHAT IS MMR Maximum marginal rate is income tax rate including applicable surcharge and cess in relation to highest slab of income for Individual, AOP, BOI specified in Finance Act of relevant year. USE OF MMR Taxation of AOP/BOI Taxation of Business trust being REIT & INVIT Taxation of Investment Fund Taxation on Accreted Income MMR rate for FY 2019-20 & 2020-21 Highest tax slab for Both FY    :  30% Highest applicable Surcharge    :  37% Health & Education Cess          :   4% So MMR will be                      ...
Read more

Income Tax Benefit available to Senior or Super Senior Citizens for FY 2019-20 (A.Y.2020-21)

 Income Tax Act,1961 offer several tax benefit and compliance relaxation to senior citizen and super senior citizen. Here we are providing a list of benefits available to them. First of all, we have to know who is consider as SENIOR or  SUPER SENIOR CITIZENS . SENIOR CITIZEN Senior Citizen means a resident individual, who is of the age of 60 years or more, but less than 80 years, at any time during the relevant previous year. SUPER SENIOR CITIZEN Super Senior Citizen means a resident individual, who is of the age of 80 years or more at any time during the relevant previous year. As per  CBDT Clarification Circular No 28/2016 dated 27th July 2016     an individual born on 1st April would complete each year of his age on 31st March, i.e. for FY 2019-20 (AY 2020-21), the date of birth (DOB) of individual should be on or before 1 April, 1960/ 1940 to complete 60/ 80 years of age on or before 31 March 2020, for getting income tax benefits/ status as a senior/ ve...
Read more

WHO IS REQUIRED TO MAINTAIN BOOKS AND ACCOUNTS UNDER INCOME TAX

 Every newly started business think about when they need to maintain proper books and accounts including records as require under income tax act,1961. Further in today complex market scenario it is difficult to detect any transaction therefore government prescribe businesses including professions to maintain proper books. Following personal require to maintain proper books and accounts that enable assessing officer to determine his total income [Sec 44AA ,Income tax act1961] Personal who carry l egal, medical, engineering, architectural, accountancy, technical advisory, interior decoration, profession of authorized representation, profession of film artist, company secretary, IT profession   are compulsory require to maintain proper accounts.       2.     In case of individual or HUF Existing business or profession where income exceed Rs 250,000 or revenue exceed Rs 25,00,000 in any one of three immediately preceding FY, OR New business...
Read more