Tax Audit

Overview

A tax audit under Section 44AB is mandatory for businesses with turnover above Rs 1 crore (or Rs 10 crore if cash transactions are below 5%) and for professionals with gross receipts above Rs 50 lakh. The audit report in Form 3CA/3CD must be filed by 30 September. A tax auditor verifies that financial statements comply with the Income Tax Act and reports specific items required by the law. Missing the deadline attracts a penalty of 0.5% of turnover, capped at Rs 1.5 lakh.