Can proprietor dealing with Export of Service + Tax Audit use Cash Based Accounting Instead of Accrual Based?

Income Tax Act 1961 Tax Audit
1

Use-Case: A proprietor dealing 100% with export of service and goes through Tax Audit every year.

Can he use Cash-based accounting or he has to use accrual based only?

Cash based accounting is more better for his use-case. He CA has been using Accrual based but proprietor wanted to switch.

2

Hello @thethinker

A proprietor can adopt either cash or accrual system as per Section 145 of the Income-tax Act, 1961, even if subject to tax audit.
Switching from accrual to cash is allowed if done for genuine reasons and followed consistently thereafter.
Proper disclosure about the change in method in the tax audit report is required, and the impact of such change on the profits.

Hope this helps !!