Section 44AB of the Income-tax Act requires a specified person to get the accounts of the previous year audited by a Chartered Accountant and to furnish the report in the prescribed form. For a mill in Basti or a trader in Gorakhpur, the practical question is: did I cross the line, and if I did, is my stock register in a condition to be reported.
The line, in outline
For business, the Act presently uses a base turnover threshold of ₹1 crore, with a higher threshold of ₹10 crore where cash receipts and cash payments each stay within 5 per cent of the respective totals. For a profession, a gross-receipts threshold of ₹50 lakh applies. These figures have been amended before and will be amended again; the year’s Finance Act is the authority, not this paragraph.
Turnover is not the GST dashboard
Job-work, discounts, sales returns, scrap, and intra-State versus inter-State classification all move the number. A GIDA unit that treats job-work as sales will cross a threshold it need not have crossed. A hotel that omits banquet advances will understate it. The tax-audit turnover and the GST annual return should be reconcilable, not identical by assumption.
What September is actually spent on
- Quantitative stock (clause of Form 3CD) — the mill’s weakest register.
- Loans and deposits versus sections 269SS / 269T.
- TDS defaults and 40(a)(ia).
- GST reconciliation.
- Payments to relatives and specified persons.
- Land and building: 43CA, 50C, 56 — frequent in Ayodhya.
The report is filed in Form 3CA (where a statutory audit already exists) or 3CB (otherwise), with 3CD. It is not a true-and-fair opinion. That difference is explained in how tax audit differs from statutory audit.
Questions this page usually meets
If I am on presumptive taxation, do I still need a tax audit?
A person who declares profits at or above the prescribed presumptive rate generally does not. A person who claims a lower profit than the presumptive rate, or who is outside those sections, may. The section should be read for the year, not remembered from a neighbour’s return.
Is the due date 30 September?
Ordinarily yes, for the report, unless CBDT extends it. The ITR of a tax-audit case is ordinarily later (31 October). Watch the calendar in September.