A tax audit under Section 44AB is a mandatory examination of a business's or professional's accounts by a chartered accountant when turnover or receipts cross prescribed limits. It ensures the books support the income declared.
This guide explains the tax audit thresholds, the forms involved, and the due dates.
What is Tax Audit under Section 44AB?
The auditor reviews the accounts and reports in Form 3CA/3CB along with the detailed statement of particulars in Form 3CD. The audit report is filed before the return.
Thresholds depend on turnover and, for businesses with mostly digital transactions, a higher limit applies.
| Business turnover limit | ₹1 crore (₹10 crore if cash receipts/payments ≤ 5%) |
|---|---|
| Professional receipts limit | ₹50 lakh (₹75 lakh in some cases) |
| Forms | 3CA/3CB + 3CD |
| Audit due date | Typically 30 September of the assessment year |
Penalties for non-compliance
- Failure to get a required tax audit can attract a penalty of 0.5% of turnover, up to ₹1,50,000
Frequently asked questions
What is the tax audit turnover limit?
₹1 crore for business (₹10 crore where cash transactions are within 5%), and ₹50 lakh for professionals (₹75 lakh in specified cases).
Who conducts a tax audit?
A practising chartered accountant, who files the report in Form 3CA/3CB and 3CD.