Professionals including lawyers, doctors, film actors, singers, interior decorators, architects and company secretaries, among others, whose total gross receipts/turnover exceeds R1 crore and/or whose professional annual fee income exceeds R25 lakh in a fiscal will have to mandatory e-file the tax audit report from the 2013-14 assessment year.

According to the latest directions issued by the income tax department, all such assessees will need to appoint a chartered accountant (CA) who will undertake the tax audit and e-file the same with digital signature.

Any violation or inability to e-file the same will attract a penalty of 0.5% of the turnover/gross receipts of the assessee subject to a maximum penalty of R1,50,000.

Explaining the reasons for mandatory e-filing of tax audit reports for such assessees, Sanjay Agarwal, a senior functionary of the Institute of Chartered Accountants of India (ICAI), said: ?We were observing that some companies/professionals were furnishing fake names and registration numbers of auditors in their returns since 2011. Such entities were not getting their accounts audited in order to save money. Therefore, upon the pursuance of ICAI, the finance ministry made these changes that require mandatory e-filing of tax audit report along with I-T returns.?

According to Amit Maheshwari, partner, Ashok Maheshwary & Associates, the e-filing of tax audit reports captures all data and makes processing easier, when compared to manually filed reports. ?This saves valuable time for the income tax department to decide which cases should be scrutinised,? he said.

The apex body of chartered accountants, ICAI, in its latest guidance note on the matter, has clarified that if either sales/turnover or professional fees exceeds the threshold, tax audit report will be a must and without any exception.

However, the ICAI has exempted the inclusion of sale proceeds of fixed assets or those held as investments, rental income or any reimbursable income from clubbing with the sales/turnover or professional fees for the tax audit purpose.

The ICAI has also capped the maximum tax audit by a member CA to 45 in an assessment year. ?The due date of filing of income tax return of an assessee liable to get his tax audit done under Section 44AB is September 30, for the rest it will remain July 31,? the guidance note said.

Another tax expert said tax audit reports were maintained by assessees and were required to be produced only when an assessing officer asked for it. ?Electronic filing of tax audit report will leave little scope for manipulation later on, thereby saving time for the department,? said Sudhir Kaushik, co-founder and CFO of Taxspanner.com.

As per the new norms, the tax audit report is to be furnished in two forms ? Form 3CA (where such accounts have already been audited) and Form 3CB (accounts yet to be audited) and the particulars required to be furnished along with these tax reports should be in Form 3CD.

The ICAI clarified in the note that the assessee is liable to get the tax audit done of both business and profession even when the gross receipts from either business or profession exceed the limit of R1 crore or R25 lakh as the case may be. ?However, if the total turnover was R95 lakh and gross receipts from business were R22 lakh, he/she would not be required to get the tax audit done,? the note said.