Technical Consultants Compliance
Yes, technical consultants are subjected to tax audits in India. The criteria for tax audit of technical consultants is mentioned under Section 44AB of the Income Tax Act, 1961. Technical Consultants Compliance
According to the section, technical consultants are required to get their accounts audited if their total gross receipts during the financial year exceed Rs. 50 lakhs. However, there are also some exceptions to this rule. For example, technical consultants who engage in the business of providing consultancy services to a single client. And the total amount of such services does not exceed Rs. 50 lakhs in a financial year do not require to get their accounts audited.
To visit: https://www.incometax.gov.in
The tax audit of technical consultants is conducted by a practicing chartered accountant. The auditor will examine the books of accounts and other relevant documents of the consultant to verify the accuracy of their income and expenses. The auditor will also report any discrepancies or irregularities to the Income Tax Department.
The penalty for not filing of tax audit report for a technical consultant is either 0.5% of the total sales, turnover or gross receipts, whichever is lower, or Rs. 1,50,000, whichever is higher.
The penalty is payable by the technical consultant, even if they are not actually liable to pay tax. The penalty intend to discourage technical consultants from evading taxes by not getting their accounts audited.
It is important to note that the penalty for not filing of tax audit report is in addition to any other penalties that may impose for tax evasion. For example, if a technical consultant fails to file their tax returns and pays taxes late, they may also be liable to interest and penalties under the Income Tax Act.
