A tax audit is mandatory under Section 44AB of the Income Tax Act for individuals, businesses, and professionals whose turnover or gross receipts exceed specified limits in a financial year. Currently, a business must undergo a tax audit if turnover exceeds ₹1 crore (₹10 crores if cash transactions are less than 5%), and a professional must undergo audit if receipts exceed ₹50 lakhs. It is also applicable to those opting out of presumptive taxation or declaring lower income than prescribed. Always consult a tax expert for the most updated thresholds.

An audit is mandatory if your business turnover exceeds ₹1 crore or professional receipts exceed ₹50 lakh in a financial year.

• Form 3CA: Used when the taxpayer’s accounts are audited under any other law.
• Form 3CB: Used when the taxpayer’s accounts are not audited under any other law.
• Form 3CD: A detailed statement of particulars required under Section 44AB.

• The tax audit report must be filed one month before the due date for filing the income tax return, typically by 30th September.

• Failure to conduct a required tax audit can result in a penalty of 0.5% of turnover, up to a maximum of ₹150000.

• Yes, if your accounts are audited under another law (e.g., Companies Act), the same report can be filed for tax audit purposes.

• Maintain accurate financial records, ensure timely compliance with tax laws, and seek professional guidance to navigate the audit process effectively.