1) The increase in Tax Audit threshold to Rs 5 Crores from Rs 1 Crores u/s 44 AB will not have much of impact as the GST audit limit is Still Rs. 2 Crores.
2) There is no amendment in Section 44 AD that means those assessees who have declared Turnover less than Rs 2 Crores can declare 6 / 8 % profit or else declare less profit by doing audit. Continuing the provision, thus no impact on tax audits.
3) There is no amendment in Section 44 ADA that means those Professionals who have annual gross receipts under Rs 50 lakhs can declare 50 % as profit or else declare less profit by doing audit. Continuing the provision, no impact on tax audits
4) GST registered assessees falling in 2 Crores to 5 Crores Turnover bracket will still need to carry the audit of books of account as the limit of GST Audit as on date is only 2 Crores becuase the GST auditor can not give his opinion as to true and fair view on part B “certification ” of GSTR9 C on the basis of unaudited books of account. Further as per instructions from CBIC to GSTR 9C, in Table 5 A The turnover as per the “audited Annual Financial Statement shall be declared”.
Thus as per my view ONLY the assesses who r not registered under GST and whose turnover is in between 2 to 5 Crores as per Section 44 AB will not require to do the audit of books of account under Income Tax as proposed in Budget 2020.
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