GST Audit vs Income Tax Audit: Key Differences
GST audit or income tax audit? Understand the key differences in applicability, turnover limits, documents, forms, due dates, and compliance requirements. My Startup Solution helps businesses manage both with clear, accurate tax guidance.
There are different guidelines and procedures to comply with GST and income tax. In this regard, GST audit vs income tax audit: key differences is important for businesses to understand and comply with the correct procedure and prevent any compliance issues. Although the procedure is similar in both cases, the purpose of the two is not the same. My Startup Solution, a CA firm, can help businesses review their tax records and compliance requirements.
Difference Between GST Audit and Income Tax Audit
To know about the difference between GST audit and income tax audit, one needs to compare their objectives, scope, records, and reports.
|
Basis |
GST Audit / Reconciliation |
Income Tax Audit |
|
Main purpose |
Reconcile GST returns with financial records |
Check accounts and report prescribed tax particulars |
|
Main law |
CGST Act and Rules |
Income Tax law |
|
Main focus |
Sales, GST liability, ITC and GST returns |
Turnover, income, expenses, deductions and tax reporting |
|
Applicability |
Depends on GST annual return and reconciliation requirements |
Depends on Section 44AB conditions |
|
Main reporting |
GSTR-9 and, where applicable, GSTR-9C |
Form 3CA-3CD or Form 3CB-3CD for the relevant period |
|
Professional role |
Current GSTR-9C is self-certified where applicable |
Tax audit report is prepared and uploaded by a CA |
Under the existing GST scheme, there is a need for self-certified GSTR-9C in case of crossing the threshold limit of prescribed aggregate turnover; unlike the previous requirement of compulsory audit by CA/Cost Accountant.
GST Audit vs Income Tax Audit Applicability and Turnover Limit
The GST audit vs income tax audit applicability will be based on different provisions. The enterprise has to verify GST annual return and reconciliation provisions independently of income tax audit criteria.
GST audit vs income tax audit applicability
In accordance with the present GST law, qualified enterprises whose turnover exceeds the prescribed threshold must submit GSTR-9C together with GSTR-9. Income Tax Audit becomes mandatory when the criteria of Section 44AB are fulfilled.
GST audit vs income tax audit turnover limit
The GST audit vs income tax audit turnover limit differs. GSTR-9C will apply when aggregate turnover surpasses the threshold of Rs. 5 crores for GST. The threshold amount for a business tax audit is Rs. 1 crore, rising up to Rs. 10 crores upon meeting the prescribed cash receipts and payments criteria.
What Is Checked in a GST Audit and an Income Tax Audit?
The records to be examined are based on the objective of each compliance requirement. A GST Audit will check GST-related transactions, while an income tax audit will check the accounts and details regarding tax.
GST Audit checks:
The following will be checked during a GST audit:
- GST returns
- Sales and purchase records
- Input Tax Credit
- Output tax liability
- Tax invoices
- GST books and reconciliations
Income Tax Audit checks:
An income tax review generally covers:
- Books of accounts
- Income and expenses
- Turnover/gross receipts
- Deductions and claims
- Tax payments
- Tax-related reporting
GST Audit vs Income Tax Audit Document Requirements
The GST audit vs income tax audit document requirements differ due to the distinct reasons behind the two compliance procedures. Some of the documents available under GST Audit include Returns, sales and purchase bills, ITC, and Reconciliation statements. In contrast, some of the documents available under Income Tax Audit include Books of account, financial statements, expenditure details, income details, and necessary documents for the audit report.
GST Audit vs Income Tax Audit Due Date
The GST audit vs Income Tax Audit due date varies based on the financial year under consideration. GSTR-9 and GSTR-9C (if any) are generally required by 31 December following the expiry of the respective financial year. Due date of Income Tax Audit is separately defined (30 September) and is usually related to the income tax return due date.
GST Audit vs Income Tax Audit Forms
GST compliance can be done by using GSTR-9 and GSTR-9C, as applicable. In case of the ITA, 1961 regime, which is applicable in the financial year 2025-26, the tax audit report form can be filled in using Form 3CA-3CD and Form 3CB-3CD. However, there has been an introduction of new forms in the case of the ITA, 2025 regime by the Income Tax Department.
Can a Business Need Both GST and Income Tax Audit?
Yes, a business can require both GST and Income Tax Audit when the conditions for each legislation are met. GST compliance will not satisfy the requirements of the income tax audit. The businesses need to reconcile the transactions and other numbers between their GST, books, and income tax accounts.
Common GST and Income Tax Audit Mistakes
There are some common mistakes that can cause issues with compliance:
- Mismatch in turnover: Mismatch in turnover declared in GST return and the books of account is possible.
- ITC problems: Issues in claiming ITC properly can give rise to GST issues.
- Missing records: There is always the possibility that the invoices and accompanying documents are not being maintained properly.
- Tax filing mistake: There might have been an error in declaring the income, expenses, or deductions.
- Late compliance: You might have to face penalties if you do not file on time.
Conclusion
The main difference between GST Audit and Income Tax Audit lies in the fact that each of these requirements is applicable to a different tax. There should be a separate analysis of applicability, turnover, documentation, forms, and deadlines. To get professional advice regarding GST and income tax, you can contact My Startup Solution at +91-7081220800.
