Tax Audit for Construction
Yes, there is a threshold limit of tax audit for construction companies that deal with works and materials.
Under Section 44AB of the Income Tax Act, 1961, a construction company is require to get its accounts audit if its total turnover or gross receipts in business for the year exceeds Rs. 1 crore.
The threshold limit of Rs. 1 crore is applicable to all construction companies, regardless of whether they deal with works and materials, or only works, or only materials.
However, there are some exceptions to this rule. For example, a construction company that is a start-up and has not been in existence for more than three years is not require to get its accounts audit, even if its turnover or gross receipts exceed Rs. 1 crore.
In addition to the threshold limit under Section 44AB, there are also some other factors that can trigger a tax audit for a construction company.
For example, if the company has been involve in any tax evasion or avoidance schemes, or if the income tax authorities have any reason to believe that the company’s accounts are not accurate, they may order a tax audit.
If you are a construction company that deals with works and materials, and your turnover or gross receipts for the year exceed Rs. 1 crore, you are require to get your accounts audited. You can appoint any chartered accountant to conduct the audit.
The audit report must be submit to the income tax authorities within six months of the end of the financial year.
To visit: https://www.incometax.gov.in
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