Income Tax Audit Quiz

What is the primary purpose of a tax audit?

• To promote cash transactions

• To ensure compliance with tax laws

• To increase business profits

• To reduce tax rates

Who is required to conduct a tax audit if their business turnover exceeds Rs. 1 crore?

• Any business entity

• Any individual taxpayer

• Only government agencies

• Only large corporations

What is the turnover limit for professionals to be subject to a tax audit?

• Rs. 50 lakh

• Rs. 25 lakh

• Rs. 1 crore

• Rs. 75 lakh

Which form is used for companies or professionals who must carry out a tax audit mandatorily?

• Form 3CE

• Form 3CD

• Form 3CA

• Form 3CB

What is the penalty for failing to file a tax audit report on time?

• 5% of total sales or Rs. 50,000

• 0.5% of total sales or Rs. 1,50,000

• No penalty is applicable

• 1% of total sales or Rs. 2,00,000

Which of the following is NOT a type of audit mentioned?

• Digital audit

• Correspondence audit

• Office audit

• Field audit

What is the threshold for businesses to avoid mandatory tax audits if cash transactions are less than 5%?

• Rs. 5 crore

• Rs. 10 crore

• Rs. 15 crore

• Rs. 20 crore

Who conducts a tax audit?

• A tax officer

• An internal auditor

• A financial analyst

• A Chartered Accountant

What happens if a taxpayer does not comply with tax audit requirements?

• They receive a tax refund

• They may face penalties

• They are exempt from taxes

• They can file late without consequences

What is the due date for filing the tax audit report?

• 30 September of the assessment year

• 31 August of the assessment year

• 30 November of the assessment year

• 31 October of the assessment year