Tax Audit Under Section 44AB: When Is It Required for Businesses and Professionals?

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Tax Audit Under Section 44AB: When Is It Required for Businesses and Professionals?

1. Basic Turnover Thresholds (Indicative)

  • Business: Tax audit generally required if turnover exceeds prescribed limits (eg. ₹1 crore / ₹10 crore depending on cash vs digital transactions – check latest limits).
  • Profession: Tax audit generally required if gross receipts exceed ₹50 lakh (check latest provisions).

2. Presumptive Taxation Cases

  • Section 44AD (business) and 44ADA (profession):
  • If you opt out of presumptive scheme in certain years or declare lower profit than deemed rate, tax audit may be triggered.

3. Due Dates and Forms

  • Tax audit report in Form 3CA/3CB with Form 3CD.
  • Due date typically earlier than ITR filing due date for audited cases.

4. Key Areas Covered in Tax Audit

  • Correctness of books of account.
  • Compliance with TDS/TCS provisions.
  • Reporting of specified domestic transactions and other disclosures in Form 3CD.

5. Practical Tips for Founders

  • Track turnover monthly to anticipate audit requirement.
  • Maintain proper books from day one (accounting software recommended).
  • Coordinate early with CA to avoid last-minute rush.
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