Semi Qualified Chartered Accountant Interview Questions and Answers

Tax audit limit for individual and partnership firm is Rs. 50 lakhs and Rs. 1 crore respectively.

• Tax audit limit for individuals is Rs. 50 lakhs of turnover or gross receipts in a financial year.

• Tax audit limit for partnership firms is Rs. 1 crore of turnover or gross receipts in a financial year.

• If the turnover or gross receipts exceed the specified limit, tax audit is mandatory.

• Tax audit helps in ensuring the accuracy of financial statements and compliance with tax laws.

Analytical procedures are techniques used by auditors to evaluate financial information by analyzing relationships among financial and non-financial data.

• Analyzing relationships among financial and non-financial data

• Used by auditors to evaluate financial information

• Helps in identifying potential misstatements or fraud

• Examples include trend analysis, ratio analysis, and variance analysis

Some clauses of tax audit report include qualifications, scope, compliance with laws, and findings.

• Qualifications: Any limitations or exceptions to the audit findings.

• Scope: Details of the audit procedures performed and the period covered.

• Compliance with laws: Confirmation of adherence to tax laws and regulations.

• Findings: Summary of the audit results and recommendations for improvements.

Sec 43(b) of income tax deals with deduction of expenses related to business or profession.

• Sec 43(b) allows deduction of certain expenses incurred for business or profession.

• These expenses must be revenue in nature and not capital in nature.

• Examples of such expenses include rent, salaries, repairs, etc.

• The deduction is allowed in the year in which the expenses are actually incurred.