What is Tax Audit?

Tax Audit is mandatory under section 44AB of the Income Tax Act, 1961. Every person carrying on business whose total sales or turnover exceeds Rs. 2 Crore and by a person carrying on profession and his gross receipts from profession exceed Rs. 50 Lakhs in the previous year, is liable to get his Tax Audit done by a Chartered Accountant mandatorily

The dictionary meaning of the term “audit” is check, review, inspection, etc. There are various types of audits prescribed under different laws like company law requires a company audit; cost accounting law requires a cost audit, etc. The Income-tax Law requires the taxpayer to get the audit of the accounts of his business/profession from the view point of Income-tax Law.

Section 44AB gives the provisions relating to the class of taxpayers who are required to get their accounts audited from a chartered accountant. The audit under section 44AB aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. The audit conducted by the chartered accountant of the accounts of the taxpayer in pursuance of the requirement of section 44AB​ is called tax audit.

The chartered accountant conducting the tax audit is required to give his findings, observation, etc., in the form of audit report. The report of tax audit is to be given by the chartered accountant in Form Nos. 3CA/3CB and 3CD. ​

Information Required

  • Documents Required for GST Registration

    Information Required

    • Business Detail
    • Mobile Number
    • Email-ID

Tax Audit Process

  • Step 1

    Enter details & get a call back from us to fix an appointment

  • Step 2

    Visit our office for tax consultation with our tax expert.

  • Step 3

    Get a customised quote depending on your tax profile

  • Step 4

    Pay fees to get your return diligently prepared & filed by our expert

Frequently Asked Questions

Tax Audit is mandatory under section 44AB of the Income Tax Act, 1961. Every person carrying on business whose total sales or turnover exceeds Rs. 2 Crore and by a person carrying on profession and his gross receipts from profession exceed Rs. 50 Lakhs in the previous year, is liable to get his Tax Audit done by a Chartered Accountant mandatorily.

Persons like company or co-operative society are required to get their accounts audited under their respective law. S​ection 44AB provides that, if a person is required by or under any other law to get his accounts audited, then he need not again get his accounts audited to comply with the requirement of section 44AB. Is such a case, it shall be sufficient if such person gets the accounts of such business or profession audited under such law and obtains the report of the audit as required under such other law and also a report by the chartered accountant in the form prescribed under section 44AB, i.e., Form No. 3CA and Form 3CD.

A person covered by section 44AB should get his accounts audited and should obtain the audit report on or before the due date of filing of the return of income, i.e., on or before 30th September (*) of the relevant assessment year, e.g., Tax audit report for the financial year 2017-18 corresponding to the assessment year 2018-19 should be obtained on or before 30th September, 2018.

According to section 271B, if any person who is required to comply with section 44AB fails to get his accounts audited in respect of any year or years as required under section 44AB, the Assessing Officer may impose a penalty. The penalty shall be lower of the following amounts:

(a) 0.5% of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such year or years.

(b) Rs. 1,50,000.

However, according to section 273B​, no penalty shall be imposed if reasonable cause for such failure is proved.