The Institute of Chartered Accountants of India (ICAI) is preparing to approach the Central Board of Direct Taxes (CBDT) with a request to extend the deadline for corporate tax audit filings, according to sources. The representation expected to be sent soon, comes amid growing concerns that companies are struggling to complete audits within the prescribed timelines.
What is a corporate tax audit?
A corporate tax audit is a compulsory review of a company’s books to check whether it is following the Income Tax Act. Carried out by a chartered accountant, the audit confirms if the business has correctly reported its income, expenses and deductions. The audit report is then filed with the tax department serving as both a safeguard against tax evasion and a foundation for the company’s annual return.
Call for parity with personal income tax
Sources said ICAI believes businesses should be granted relief similar to that given to individual taxpayers. The government had provided extra time for personal income tax return filings, acknowledging the pressure on both taxpayers and professionals.
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The Institute of Chartered Accountants of India (ICAI) has urged that corporate tax audits, which are mandatory under the Income Tax Act, be given more breathing room. At present, firms have to get their audits done before they can file annual returns, and any delay can attract penalties. The ICAI points out that auditors are overloaded and many companies, particularly those with operations in several states, struggle to wrap up accounts and handle audit queries within the tight timelines. Granting an extension, it says, would reduce errors and ease pressure on both companies and tax professionals.
If the request is accepted, corporates will get extra time to complete their audits and file returns. If not, they’ll have to stick to the current deadline, leaving little margin for delays.