Tax Audit penalties for wholesaler
Yes, there can Tax Audit penalties for wholesaler in India.
According to the Income Tax Act of India, businesses that meet certain financial thresholds required to have their accounts audited by a chartered accountant and submit a tax audit report along with their income tax return.
This requirement is applicable to wholesalers and other businesses as well.
If a wholesaler fails to file the tax audit report within the due date, they could face the following consequences:
1. Penalty under Section 271B:
The primary penalty for not filing a tax audit report on time can cover under Section 271B of the Income Tax Act.
As of my last update in September 2021, a penalty equal to half a percent (0.5%) of the total turnover or gross receipts, subject to a maximum of ₹1,50,000, can be impos.
This penalty is levied at the discretion of the assessing officer and depends on the duration of the delay.
2. Disallowance of Expenses:
If a wholesaler does not furnish the tax audit report, the assessing officer may disallow certain expenses claimed in the income tax return. This can lead to an increased taxable income and higher tax liability.
3. Interest on Tax Liability:
In addition to the penalty, if the tax liability is not paid on time due to the failure to file a tax audit report, the wholesaler may also be liable to pay interest on the overdue tax amount.
It’s important to note that tax laws and regulations can change over time, so it’s recommended to consult with a tax professional or the latest official sources for the most up-to-date information regarding penalties and consequences for not filing a tax audit report in India.
To visit: https://www.incometax.gov.in
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