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CA Final · Direct Tax Laws & International Taxation · Tax Audit and Ethical Compliances

Dr. Meera Iyer, a consultant, earned gross professional receipts of Rs. 62 lakh in the tax year. She is not covered by the presumptive provisions in section 61(2). Which statement about her tax audit obligation under section 63 is correct?

She must get her accounts audited, because a person carrying on profession is subject to tax audit under section 63 when gross receipts exceed Rs. 50 lakh, and her receipts are Rs. 62 lakh. The cash-based enhancement applies only to business turnover.

  1. AShe need not get accounts audited because the limit for professionals is Rs. 1 crore
  2. BShe must get accounts audited because gross receipts exceed Rs. 50 lakhCorrect
  3. CShe must get accounts audited only if cash receipts exceed 5%
  4. DShe need not get accounts audited unless she has business turnover

Explanation

Under section 63(1) Table Sl. No. 1(c), a person carrying on profession must get accounts audited if gross receipts exceed Rs. 50 lakh in the tax year. Rs. 62 lakh exceeds that. The enhanced Rs. 10 crore limit applies only to business turnover, not to professions.

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