A tax audit under Section 44AB of the Income Tax Act is required when business turnover exceeds Rs 1 crore (Rs 10 crore if cash transactions are within 5%), professional receipts exceed Rs 50 lakh, or presumptive taxpayers declare lower profits in specified cases. A chartered accountant files the report in Form 3CA or 3CB with Form 3CD, generally by 30 September.
Who needs a tax audit
- Businesses with turnover above Rs 1 crore, or Rs 10 crore where cash receipts and payments are each within 5%
- Professionals with gross receipts above Rs 50 lakh
- Presumptive taxpayers declaring profit below the prescribed rate with income above the exemption limit, in specified cases
Forms involved
| Form | Used when |
|---|---|
| 3CA | Accounts already audited under another law, such as the Companies Act |
| 3CB | Accounts not audited under any other law |
| 3CD | Statement of particulars, filed with either |
Process
- Close books and prepare financial statements.
- Appoint a CA and assign the audit on the income tax portal.
- CA verifies records and prepares Form 3CD.
- Taxpayer accepts the uploaded report.
- File the ITR by the audit case due date.
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Get expert help →Penalty
Failure to get accounts audited or furnish the report attracts a penalty of 0.5% of turnover or gross receipts, up to Rs 1.5 lakh, under Section 271B, unless reasonable cause is shown.
Frequently asked questions
Is tax audit required for companies with low turnover?
Companies always need a statutory audit under the Companies Act, but a tax audit under Section 44AB applies only if the turnover or other conditions are met.
What is the ITR due date for tax audit cases?
For taxpayers requiring a tax audit, the ITR is generally due by 31 October, and the audit report by 30 September, subject to extensions.
Can a tax audit report be revised?
A tax audit report can be revised in limited circumstances, such as a change in law or payments that affect disallowances, with reasons stated.
Does GST turnover matter for tax audit?
Tax audit turnover is based on the books, but GST data is compared by the department, so reconcile both before filing.
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