Tax Audit (Section 44AB)

What a tax audit is

A tax audit is an examination of a business or profession’s books of account by a Chartered Accountant under section 44AB of the Income Tax Act, culminating in an audit report in Form 3CA/3CB and the detailed Form 3CD. Its purpose is to verify that your accounts give a true and fair view and that income, deductions and disclosures comply with tax law — giving the department reliable, standardised information and reducing the chance of disputes.

A tax audit is not the same as a statutory audit under the Companies Act; it is specific to income-tax compliance and is triggered by turnover/receipt thresholds or by certain elections (such as declaring profits below presumptive rates). Once applicable, the audit report must be filed before the return.

When a tax audit is mandatory

• Business turnover exceeds ₹1 crore in the financial year.
• The ₹1 crore limit rises to ₹10 crore where both cash receipts and cash payments are ≤5% of the total (digital-first businesses).
• Professional gross receipts exceed ₹50 lakh.
• A taxpayer under the presumptive scheme declares income below the prescribed rate while total income exceeds the basic exemption limit.

The audit process

• We review your books, ledgers, bank statements, GST and TDS data for the year.
• We reconcile turnover and tax credits, and identify disallowances under sections like 40A(3), 43B and 40(a).
• We prepare Form 3CD with all required clauses and the audit report in Form 3CA/3CB.
• We file the audit report and align it with your income tax return to prevent mismatches.

Documents required

• Books of account, trial balance, P&L and balance sheet.
• Bank statements, purchase/sales registers and stock records.
• GST returns, TDS returns and challans.
• Fixed-asset register, loan statements and details of related-party transactions.

Due date and penalty for default

The tax-audit report must generally be filed by 30 September, and the return by 31 October of the assessment year. Failure to get accounts audited or to file the report on time attracts a penalty under section 271B — 0.5% of turnover/gross receipts, up to a maximum of ₹1,50,000. Late filing also blocks your return and can invite scrutiny. We plan the audit early so the deadline is comfortable, not a crisis.

Why TCC for your tax audit

Our CA-led team conducts a thorough, defensible audit, gets the Form 3CD clauses and disallowances right, and files report and return in sync — protecting you from section 271B penalties and from the mismatch notices that careless audits invite. Fixed fee, planned ahead of the deadline.