As per Finance Act 2010, audit of Accounts Limit has been increased w.e.f. 01.04.2011 or Financial Year 2010-11. It means that the persons carrying on Business and having his total sales or turnover or gross receipts as the case may be, in business exceeds limit of forty lakh in any Financial Year, are mandatory to get audit their accounts in the year 2010-11 as assessment year. But from the next Assessment Year this limit will be increased to Rs. 60 Lakh.
In the other hand persons carrying on profession and having gross receipts in profession is Rs. 10 Lakh in this Assessment Year 2010-11 and it will be increased to Rs. 15 Lakh w.e.f. 01.04.2011 (Assessment Year 2011-12).
(Finally, audit of accounts for current financial year 2010-11 u/s 44AB will be done on the basis of Increased limit)
As per Income Tax Act, section 44AB can be read as under :-
72[Audit of accounts of certain persons carrying on business or profession.
(a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds 74a[forty lakh rupees] in any previous year 75[***]; or
(b) carrying on profession shall, if his gross receipts in profession exceed 75a[ten lakh rupees] in any 76[previous year; or
(c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under 77[section 44ADor section 44AE or section 44AF] 78[or section 44BB or section 44BBB], as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any 79[previous year,]] 80[***]
The following clause (d) shall be inserted after clause (c) of section 44AB by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2011 :
(d) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year,
get his accounts of such previous year 81[***] audited by an accountant before the specified date and 82[furnish by] that date the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed :
83[Provided that this section shall not apply to the person, who derives income of the nature referred to in 84[***] section 44B or 85[section 44BBA], on and from the 1st day of April, 1985 or, as the case may be, the date on which the relevant section came into force, whichever is later :
Provided further that] in a case where such person is required by or under any other law to get his accounts audited 86[***], it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and 87[furnishes by] that date the report of the audit as required under such other law and a further report 88[by an accountant] in the form prescribed under this section.
Explanation.—For the purposes of this section,—
(i) “accountant” shall have the same meaning as in the Explanation below sub-section (2) of section 288;
89[(ii) “specified date”, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the 90[30th day of September] of the assessment year.]]