The Finance Minister Nirmala Sitharaman on Monday announced the increase in the Tax Audit Limit increased to Rs.10 crores for those using Digital Transaction Mode.
The objective behind the increase in the Tax Audit Limit is to promote digital transactions. This move of the government has given a set back to the various tax audit firms and at the same time it is the most welcomed move of the government for the small and medium enterprises.
“Currently, if your turnover exceeds 1 crore, you have to get your accounts audited. In the February 2020 Budget, I had increased the limit for tax audit to `5 crore for those who carry out 95% of their transactions digitally. To further incentivise digital transactions and reduce compliance burden, I propose to increase this limit for tax audit for such persons from `5 crore to `10 crore,” Finance Minister in her Budget 2021-22 speech said.
Most of the CAs has opined that the scenario in which the Business Houses in India are working, they cannot work through only bank mode, they have to use cash be it the payment of salary to the labours and other payments which are mostly done in cash, so it would not impact the CAs largely.
However, it is said that the deletion of the GST Audit would have an adverse impact on the CAs.
“Audit Limit Increase to 10 Crore if transaction are Digital #Budget2021 Only 1% will fall in the digital category. No Impact as such on Tax Audits,” one of the CA tweed.
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