What is Tax Audit?

A tax audit is the process of verification and inspection of the accounts of a taxpayer to confirm their adherence to the provisions of the Income Tax law. Section 44AB of the Income Tax Act, 1961 deals with the Audit of the Accounts of a certain category of persons carrying on a business or engaged in a profession.

When a Tax Audit u/s 44AB is Required?

In the following case tax audit is compulsory required:-
Case 1 :
Specified Profession: If gross receipts exceed 50 lakhs.

Case 2 :
Person Carrying Business: If Turnover or Gross receipts exceed 1 Cr.

Note :-
In case of business, Turnover Limit shall be Rs.10 Cr.

If-

• cash receipts out of total receipts is upto 5% during the PY and
• cash Payments out of total payments is upto 5% during the.

(cheque/DD, which is not account payee, shall be treated as cash)

Case 3. Special cases:

• Assessee claiming lower income u/s 44AD or 44ADA and net total income exceeds basic exemption limit
• Assessee claiming lower income u/s 44AE, 44BB, 44BBB

Non-Applicability of Tax audit:-

• Person Declaring income u/s 44AD or 44ADA
• Person deriving income in the nature referred to in section 44B(ship) & 44BBA(aircraft)

Penalty u/s 271B if assessee fails to get account audited u/s 44AB:

• 0.5% of turnover/gross receips or
• Rs. 1,50,000
  Whichever is lower

Tax Audit Report u/s 44AB Read with Rule 6G

Form 3CA + 3CD	Account of Assessee already audited under any other law like Companies Act, 2013 or LLP Act, 2008
Form 3CB + 3CD	Account of Assessee not audited under any law
Revised Tax Audit Report	Tax Audit Report may (option) be revised by the person (assessee) by getting revised report of audit from CA and furnish it before the end of the AY for which the report pertains, if there is payment by such person after furnishing of Tax Audit Report which necessitates recalculation of disallowance u/s 40 or 43B. Tax audit Report can be revise multiple times.

What is the Time Limit of Furnishing Tax Audit Report u/s 44AB?

Tax audit report shall be furnished by 1 month before the due date of furnishing of return u/s 139(1) ie. Upto 30th September of the relevant assessment year in prescribed form(3CA/3CB/3CD).

Package

• For individual/Huf/AOP/BOI – 10,000
• For Parnership Firm/LLP – 12,000
• For Company/Trust – 15,000