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Tax audit is compulsory in case of a person in a profession whose gross receipts from the profession exceed:

Tax audit is compulsory in case of a person in a profession whose gross receipts from the profession exceed: Correct Answer Rs.50 Lakh

The correct answer is Rs.50 Lakh

Key Points

The Income Tax Act, 1961 is a comprehensive statute that focuses on the various rules and regulations that govern taxation in the country. It provides for levying, administering, collecting, and recovering income tax for the Indian government. 

A tax audit is an examination of a tax return by the IRS to verify that your income and deductions are precise. 

There are three main types of tax audit namely external audit, internal audit, and Internal Revenue Service (IRS) audit.

Important Points

As per  Section 44AB of the Income Tax Act, 1961:

  • Every person carrying on a business is entitled to get his accounts audited, if his turnover, total sales, or gross receipts in business exceeds Rs. 1 crore in the previous year
  • Every person carrying on a profession is entitled to get his accounts audited if his gross receipts in profession exceed Rs. 50 lakhs in the previous year.

Therefore, a tax audit is compulsory in case of a person is carrying on a profession whose gross turnover exceeds Rs. 50 Lakh.

Related Questions

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