Tax Audit (Sec 44AB)
3CA/3CB-3CD by experienced CAs
Statutory tax audit under section 44AB with complete 3CD clause-wise reporting and e-filing before the due date.
What's included
- Books verification & finalisation
- Form 3CA/3CB-3CD preparation
- Clause-wise 3CD reporting
- UDIN & e-filing
Understanding Tax Audit (Sec 44AB)
A tax audit under Section 44AB of the Income-tax Act is a detailed examination of your books of account by a Chartered Accountant, who then certifies the results in Form 3CA or 3CB along with the detailed statement of particulars in Form 3CD. It is mandatory once your business turnover crosses ₹1 crore in a financial year, or ₹10 crore if at least 95% of your receipts and payments are digital. For professionals, the threshold is gross receipts of ₹50 lakh.
The tax audit is not just a formality. Form 3CD runs to over 40 clauses covering everything from depreciation and disallowances under Section 40A to TDS compliance, loans accepted in cash, and GST turnover reconciliation. The Assessing Officer relies heavily on this report, so errors or inconsistencies in it are one of the most common triggers for scrutiny notices. A carefully prepared report protects you; a careless one invites questions.
With the FY 2025-26 audit season now underway, the due date to file the tax audit report for most taxpayers is 30 September 2026. Missing it attracts a penalty under Section 271B of 0.5% of turnover, capped at ₹1.5 lakh. We handle the entire engagement — ledger scrutiny, clause-by-clause 3CD preparation, and e-filing with your digital signature — typically within 7 to 14 working days once your books are ready.
Who needs this?
Businesses above ₹1 crore turnover
Any business — proprietorship, partnership, LLP or company — with total sales, turnover or gross receipts exceeding ₹1 crore in FY 2025-26 must get its accounts audited under Section 44AB.
Digital-first businesses above ₹10 crore
If cash receipts and cash payments are each 5% or less of the total, the audit threshold rises to ₹10 crore. You still need the audit once you cross that higher limit.
Professionals earning over ₹50 lakh
Doctors, lawyers, architects, consultants and other specified professionals with gross receipts above ₹50 lakh in the year need a tax audit, regardless of how profitable the practice is.
Presumptive taxpayers declaring lower income
If you opted out of Section 44AD/44ADA by declaring profit below the presumptive rate (8%/6% for business, 50% for profession) and your income exceeds the basic exemption limit, a tax audit becomes mandatory.
F&O and intraday traders
Futures, options and intraday equity trading count as business income. Depending on your turnover computation and whether you declare losses while opting out of presumptive taxation, audit may apply — worth checking before the deadline.
Businesses exiting the presumptive scheme
If you declared presumptive income under 44AD in earlier years and now declare lower profits within the 5-year lock-in, audit applies even at modest turnover levels.
When this is NOT the right fit
| Your situation | What applies instead |
|---|---|
| ✕Turnover below ₹1 crore (or ₹10 crore with 95% digital transactions) | Section 44AB simply does not apply. You can file your return without an audit report, though maintaining proper books is still advisable. |
| ✕Presumptive taxpayers under 44AD/44ADA declaring the prescribed profit rate | If you declare 8%/6% of turnover (business) or 50% of receipts (profession) or more, you are specifically exempted from tax audit even above normal limits, up to the presumptive turnover ceilings. |
| ✕Salaried individuals with only salary, house property and capital gains income | Tax audit applies only to business or professional income. Salary, rent and capital gains never trigger Section 44AB by themselves. |
| ✕You want the audit signed without sharing complete books | A CA cannot certify Form 3CD without verifying ledgers, bank statements and supporting records. We do not issue reports on incomplete or unverifiable data. |
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Documents you'll need — and why
Complete books of account (ledgers, cash book, bank book)
The audit is an examination of these books — every figure in Form 3CD flows from them. Tally, Zoho or Busy backups work fine.
Bank statements for all business accounts (full year)
We reconcile book balances with bank balances and check for cash deposits, loan receipts and payments above cash limits under Sections 40A(3), 269SS and 269T.
GST returns (GSTR-1, GSTR-3B) and annual return
Clause 44 of Form 3CD and turnover reconciliation require matching GST-reported turnover with books. Mismatches here are a leading cause of notices.
TDS returns filed (Form 26Q/24Q) and Form 26AS/AIS
Form 3CD reports TDS defaults clause by clause. We verify tax was deducted and deposited on rent, contractor payments, professional fees and salaries.
Fixed asset register with purchase invoices
Depreciation claimed under Section 32 must be supported by asset-wise details — date put to use, cost, and block classification all go into the 3CD.
Loan agreements and statements for secured/unsecured loans
Loans or deposits of ₹20,000 or more accepted or repaid otherwise than through banking channels must be reported, and interest disallowances checked.
Stock/inventory records and year-end valuation working
Closing stock valuation method must be disclosed in the 3CD, and any deviation from Section 145A treatment quantified.
Previous year's audit report and ITR
Ensures consistency in accounting policies, carried-forward disallowances, and brought-forward depreciation and losses.
How it works, step by step
- 1
Engagement and data collection
Day 1-2We issue the engagement letter, take your books backup, bank statements and returns, and run an initial completeness check so nothing stalls midway.
- 2
Ledger scrutiny and verification
Day 3-7Detailed vouching of expenses, bank reconciliation, cash transaction checks, TDS and GST cross-matching, and identification of disallowances or reporting items.
- 3
Form 3CD preparation and query resolution
Day 7-10We draft the clause-by-clause 3CD, share our observations and queries with you, and incorporate your clarifications and missing documents.
- 4
Draft report review with you
Day 10-12You review the draft 3CA/3CB-3CD, including any qualifications or observations, before anything is signed. No surprises after filing.
- 5
Signing and e-filing
Day 12-14The CA signs with digital signature and uploads the report on the income-tax portal; you accept it from your login. We share the acknowledgement and final PDFs.
Due dates to know
Tax audit report for FY 2025-26 (AY 2026-27)
30 September 2026
One month before the ITR due date of 31 October 2026 for audited taxpayers.
ITR filing for audited taxpayers
31 October 2026
The audit report must be filed and accepted before the return.
Transfer pricing cases (Form 3CEB applicable)
31 October 2026
ITR due date extends to 30 November 2026 in these cases.
What non-compliance costs
Failure to get accounts audited or file the report by the due date
Penalty under Section 271B of 0.5% of turnover or gross receipts, subject to a maximum of ₹1,50,000. Relief is possible only for reasonable cause under Section 273B.
Filing the ITR without the mandatory audit report
The return can be treated as defective, and claims dependent on audit (like certain deductions) may be denied until the defect is cured.
Incorrect reporting in Form 3CD leading to under-assessment
Scrutiny, disallowances with interest under Sections 234B/234C, and possible penalty under Section 270A of 50% to 200% of tax on under-reported income.
Why doing this right pays off
Scrutiny-resistant reporting
A clean, internally consistent 3CD that reconciles with your GST returns and 26AS dramatically lowers the chance of your return being picked up for scrutiny.
Disallowances caught before filing
We flag cash payment breaches, TDS lapses and personal expenses booked to business before they become additions in assessment — while you can still fix or explain them.
Penalty protection
Filing on time eliminates the ₹1.5 lakh Section 271B exposure entirely, and correct reporting shields you from the far larger Section 270A penalties.
Bank and investor ready financials
Audited financials with a CA-certified report are the baseline document banks ask for when renewing limits or sanctioning fresh loans.
Fixed fee, senior CA review
₹11,999 all-inclusive for standard engagements, with every report reviewed by a partner-level CA before signing — not just a junior running software.
Common DIY mistakes we see
- Waiting until September to hand over books, leaving no time to fix TDS or GST mismatches the audit uncovers.
- Assuming F&O losses mean no audit is needed — the turnover computation and presumptive opt-out rules often say otherwise.
- Treating the ₹10 crore digital threshold as automatic without actually testing the 5% cash receipts and payments condition.
- Ignoring clause 44 GST expense break-up, which the department now actively cross-verifies against GSTR data.
- Booking personal expenses, family salaries without justification, or round-sum cash expenses that any auditor must report.
Frequently asked questions
Probably not. If your cash receipts and cash payments are each 5% or less of the totals, the audit threshold is ₹10 crore, so at ₹2 crore you are exempt. We verify the 5% condition from your bank book before confirming, because getting it wrong risks a ₹1.5 lakh penalty.
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All-inclusive professional fee. Government fees (if any) extra at actuals.
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Tax audit report due — FY 2025-26
30 September 2026 — book now and beat the last-minute rush.