Income Tax Audit: According to the Income Tax Act, 1961, some taxpayers have to compulsorily undergo income tax audit of their accounts. Income tax audit is a thorough inspection of the books of accounts of a business entity or a professional person. In such a situation, let us know which documents are necessary for this.
Income Tax Return: A person with business or professional income needs to maintain several documents for income tax audit. The list of documents includes accounts, cash books, ledgers, journals etc. Moreover all these documents should be maintained in a specific format and as per the prescribed principles. In fact, income tax audit is mandatory for high income businessmen by the government and audit is necessary to ensure accurate reporting, prevent tax evasion and maintain fairness in revenue collection.
Income tax return
Which documents are required to be maintained for Income Tax Audit? The documents required for income tax audit are the same for all those who are required to conduct income tax audit. However, professionals related to legal, engineering, medical etc. are also required to maintain some additional documents.
These are important documents for income tax audit
- Cash book, which contains all cash day-to-day transactions.
- Journal Book.
- A ledger that will record all debits and credits.
- Carbon copy of the bill.
- Original bills issued to the individual and receipts in respect of expenditure. However, if bills and receipts have not been issued and the expenditure incurred does not exceed Rs 50, taxpayers will need to maintain only the signed payment vouchers.
Balance sheet
Apart from the above every taxpayers subject to income tax audit will be required to maintain their financial statements like trial balance, profit and loss statement for the financial year, balance sheet etc. Apart from the above, the medical professional should also submit Form No. Daily case register in 3C, inventory of first and last day of the previous year will also be required. Whereas the last date of income tax audit for the financial year 2022-23 (AY 2023-24) is September 30, 2023. The last date for filing ITR along with audit report is October 31, 2023.
