Budget 2021 – Tax Audit Limit Raised To ₹ 10 Crores
The turnover limit for the audit of small businesses was revised in the last Budget – 2020 to ₹5,00,00,000/- from ₹1,00,00,000/-. However, the condition placed was that about 95% of the receipts and payments should have been made in non – cash transactions (digital or banking transactions). This benefit is granted to small businesses in order to promote digital transactions and hence the digital economy.
In Budget – 2021, this limit of ₹5,00,00,000/- is enhanced to ₹10,00,00,000/-. However, out of total transactions, cash transactions are permitted only up to 5% of the receipts and payments and 95% of the receipts and payments must be in non – cash transactions like banking and digital transactions. This measure in the Budget – 2021 is going to ease a lot of compliance burden from the shoulders of small businesses.