For reference the link has been mentioned for detailed

industryspecification http://ebook.mca.gov.in/Actpagedisplay.asp
x?PAGENAME=24447
If company fulfill the criteria which are mentioned below need to
appoint the Cost Auditor of the Company.
Non Applicability of Cost Audit
The following Companies are not required to conduct the cost
audit in India:
-The Company whose revenue from exports are in Foreign
Exchange exceeds 75% of its total revenue.
-Operating from Special Economic Zone( SEZ).
-Engaged in the generation of electricity for captive
consumption through Captive Generating Plant
Who can be appointed as a Cost auditor?
 An Individual (who can be a Cost Accountant)
 A Firm of cost Accountant in practice
Within what period Cost Audit Report should be
submitted?

A cost auditor is required to submit his audit report along

with his/ her qualifications, reservations, observations or
suggestions if any, in form CRA-3 to Board of Directors of
the Company within 180 days from the closure of financial
year to which the report relates.

The Audit Report shall be filed with the Central Government

within 30 days from the date of receipt of the Audit Report.
Penalty for Non-Compliance
Any non- compliance made under this Audit, the Company and
every officer of the Company who is in default shall be punishable
as mentioned under:
Company shall be punishable with fine which shall not be less than
Rs. 25,000 but it may extend to Rs. 5 Lakh and
Every officer of the Company who is in default shall be punishable
with imprisonment for a term which may extend to one year or
with fine which shall not be less than Rs. 10,000 but it may
extend to Rs. 1 Lakh or both
If the Cost Auditor has contravened the provisions, he shall be
punishable with imprisonment for a term which may extend to
one year and with fine which shall not be less than Rs. 50,000
but it may extend to Rs. 25 Lakh or eight times the
remuneration of the Cost Auditor, whichever is less.
Income Tax Audit is a way to examine an individual's
organization tax returns by any outside agency. Income Tax
Audit done to verify all income, get the deduction information or
about expenditures incurred. To do tax audit is mandated as per the
provisions of the Income Tax Act.
 Tax Audit Meaning:

•A Tax Audit is an audit, made compulsory by the Income Tax

Act, if the annual gross turnover/receipts of the assessee exceed
the specified limit. Tax audit is conducted in Sec 44AB of the
Income Tax Act,1961 by a Chartered Accountant.
•Simply Tax Audit means, an audit of matters related to tax.

Due Date
a.Due date for filing of tax audit report – 30th September of
the assessment year
b.Due date for return filing (if tax audit is applicable) – 30th
September of the assessment year
c.Due date for return filing (if tax audit is not applicable) – 31st
July of the assessment year
 Tax Audit Applicability:

The Following persons need to be liable for tax

audit Us 44 AB
•Business: Rs. 1 Crore. It means an assesse need to
be audited under Sec.44AB if his annual gross
turnover/receipts in business exceeds Rs. 1 Crore.

•Profession: Rs. 50 Lakh. It means an assesse need

to be audited under Sec 44AB if his annual gross
receipts in profession exceeds Rs. 50 Lakh.
 Applicability of Section 44AB

•A Person who is carrying on business, and whose total

sales/turnover/gross receipts from business exceeds Rs. 1 crore.

• Exception – The above provision is not applicable to the

person, who opts for presumptive taxation scheme under
section 44AD and his total sales/turnover does not exceeds
Rs. 2 crores.(Previously this limit was Rs. 1 Crore before
2016 Budget)

•A person who is eligible to opt for the presumptive taxation

scheme of section 44AD but claims the profits or gains for such
business under non – presumptive scheme which is lower than the
profits and gains computed as per the presumptive taxation scheme
of section 44AD and his income exceeds the amount which is not
chargeable to tax.
 Amendments in Budget 2020-2021

Turnover not more than Rs. 5 crores, but Cash receipts not exceeding 5% of
total turnover and cash payments not exceeding 5% of total expenditure

Not liable for Tax Audit from F.Y 2020-2021 onwards

Example – A company having turnover Rs. 4.5 crores in F.Y 2020-21,
then that company is not liable for tax audit.
Turnover less than Rs. 2 crores(but more than Rs.1 crore), but Cash
receipts exceeding 5% of total turnover and cash payments exceeding
5% of total expenditure

Liable for Tax Audit under section 44AB from F.Y 2020-2021 onwards if
the assessee does not declare profits at least 6% or 8% as per section 44AD

Example – A company having turnover Rs. 1.5 crores in F.Y 2020-21

and more than 5% of business transaction is in cash will be liable to Tax
Audit if the assessee does not show Profits at least 6% or 8% as per
section 44AD.