Audit under Income Tax Act

Audit under the Income Tax Act, 1961 is a specialised examination of books of account and tax compliance carried out by a Chartered Accountant to ensure that income, deductions, and disclosures are correctly reported in line with tax laws.

With evolving provisions on turnover thresholds, presumptive taxation, transfer pricing, and faceless assessments, businesses and professionals must accurately determine audit applicability and meet timelines to avoid penalties and scrutiny.

We provide complete tax audit and certification services — from determining applicability and reviewing books to filing Form 3CA/3CB-3CD, Form 3CEB, and other reports — ensuring accuracy, compliance, and audit-readiness.

Our Income Tax Audit Services

Tax Audit u/s 44AB

Audit of books of account for businesses and professionals exceeding prescribed turnover or receipts limits, with reporting in Form 3CA/3CB-3CD.

Presumptive Scheme Review

Advisory and audit support under Sections 44AD, 44ADA, and 44AE for taxpayers opting in or out of presumptive taxation.

Transfer Pricing Audit

Audit and certification of international and specified domestic transactions in Form 3CEB under Section 92E.

Trust & NGO Audit

Audit of charitable trusts and institutions under Section 12A/10(23C) with reporting in Form 10B / 10BB.

Form 10CCB & Other Reports

Certifications and audit reports for deductions under Sections 80-IA, 80-IB, 80-IC, 80JJAA, and similar provisions.

TDS & TCS Compliance Review

Verification of TDS/TCS deduction, deposit, return filing, and reconciliation with books and Form 26AS / AIS.

Income & Disallowance Review

Examination of income, expenses, and disallowances under Sections 40, 40A, 43B, and other applicable provisions.

Audit Documentation & Filing

Preparation of working papers, e-filing of audit reports on the Income Tax portal, and assistance with assessment-stage queries.

Our Audit Process

Applicability Check

Evaluation of turnover, receipts, and nature of business to determine the applicable section and audit form.

Information Gathering

Collection of books, ledgers, tax records, and supporting documents for systematic review.

Verification & Testing

Detailed verification of income, expenses, TDS, GST reconciliation, and statutory disallowances.

Report Finalisation

Preparation of Form 3CA/3CB-3CD or 3CEB with accurate clause-wise disclosures and management discussion.

E-Filing & Acceptance

Upload of audit report on the Income Tax portal and coordination with the assessee for digital acceptance.

Why Audit under Income Tax Act Matters

✓ Mandatory compliance under Section 44AB and allied sections

✓ Avoids penalty under Section 271B (up to 0.5% of turnover)

✓ Ensures accurate reporting of income and deductions

✓ Reduces risk of scrutiny and faceless assessment issues

✓ Validates TDS, TCS, and statutory dues compliance

✓ Strengthens documentation for transfer pricing

✓ Identifies disallowances and tax planning opportunities

✓ Supports clean tax history for loans and approvals

FAQs on Audit under Income Tax Act

Who is required to get a tax audit done?

Tax audit under Section 44AB applies to businesses with turnover exceeding the prescribed limit and professionals whose gross receipts exceed the specified threshold. Higher limits apply where digital receipts and payments are within prescribed percentages. Audit is also required for assessees opting out of presumptive taxation while declaring income lower than the deemed amount.

What is the difference between Form 3CA and Form 3CB?

Form 3CA is filed when the assessee is already required to get accounts audited under any other law, such as the Companies Act. Form 3CB is filed when accounts are not required to be audited under any other law and the audit is being conducted only under the Income Tax Act. In both cases, Form 3CD with detailed particulars is filed alongside.

What is the due date for filing the tax audit report?

The tax audit report is generally required to be filed one month before the due date of return filing for assessees subject to audit. The exact deadline may vary year to year based on extensions notified by the CBDT and the nature of the assessee, including those involved in transfer pricing.

What is the penalty for non-compliance with tax audit?

Under Section 271B, failure to get accounts audited or furnish the audit report on time can attract a penalty of 0.5% of total sales, turnover, or gross receipts, subject to a maximum prescribed limit. The penalty may be waived if the assessee proves a reasonable cause for the failure.

Is tax audit applicable for those under presumptive taxation?

Generally, taxpayers opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE are not required to undergo tax audit. However, audit becomes applicable if they declare income lower than the prescribed deemed profit and their total income exceeds the basic exemption limit, subject to other conditions.

What is Form 3CEB and who needs it?

Form 3CEB is a transfer pricing audit report required under Section 92E from every person who has entered into international transactions or specified domestic transactions during the year. It contains details of the transactions and the methods used to determine arm's length pricing.

How does tax audit differ from statutory audit?

Statutory audit is conducted under the Companies Act, 2013 to verify that financial statements give a true and fair view. Tax audit is conducted under the Income Tax Act, 1961 with a focus on accurate computation of taxable income, allowable deductions, and compliance with tax laws. Both can apply to the same entity simultaneously.

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