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Income Tax Audit (Sec. 44AB)

Tax Audit — accurate, on-time, bank-ready

We assess applicability, review books & controls, run analytics, and issue the audit report with robust observations — minimizing risk of adjustments and notices.

Applicability Our Process Documents Advantages Calendar 3CD Clauses
Standards-aligned Analytics-led Time-bound
FORM 3CD/3CA-3CB
Overview

What is a Tax Audit under Section 44AB?

An independent examination of books & compliance to report prescribed particulars in Form 3CD — issued along with Form 3CA/3CB as applicable.

Scope

Verification of books, compliance checks (TDS/TCS, GST tie-outs), and reporting of key clauses impacting tax liability.

Outputs

Form 3CD with observations, reconciliations & management representations; 3CA/3CB signed by auditor.

E-filing

Filed using audit utility & DSC/e-verify. Report flows to your ITR workflow seamlessly.

Applicability

Who needs a Tax Audit?

Indicative triggers — we confirm the latest thresholds/notifications during scoping.

Business (44AB(a)/(e))
  • Turnover > â‚ą1 crore (general rule).
  • Enhanced limit up to â‚ą10 crore if cash receipts & cash payments are each ≤ 5% of total (digital mode predominates).
  • Opted 44AD presumptive but declaring lower profit than deemed %, and total income exceeds basic exemption.
Profession (44AB(b)/(d))
  • Gross receipts > â‚ą50 lakh.
  • Opted 44ADA presumptive but declaring lower profit than deemed %, and total income exceeds basic exemption.
  • Conversions/mergers or multiple branches requiring consolidated reporting.
Certain sectors (e-comm, exporters, NBFC-like businesses) need extra care on turnover recognition & regulatory tie-outs. We’ll tailor audit procedures accordingly.
Process

How we deliver your Tax Audit

Time-bound steps with clear deliverables and review gates.

Phase What happens Deliverable Status
1. Scoping Applicability check, engagement terms, timelines, materiality. Engagement Letter, Audit Plan Start
2. Data Room Trial balance, ledgers, bank statements, inventory & revenue templates; GST/26AS/AIS downloads. Document checklist & tracker Collect
3. Testing Cut-off tests, revenue analytics, related party, TDS/TCS, depreciation, 43B, 40(a)/(b) checks. Exception log & queries Review
4. Recos Management responses, adjustments & notes finalised; CARO-style observations where relevant. Final exception closure Close
5. Filing 3CD + 3CA/3CB signed & e-filed with DSC; share acknowledgement & JSON. Filed audit report File
Documents

Checklist to get started

Keep legible, signed, and consistent data to speed up closure.

Books & Ledgers

Trial balance, GL, debtor/creditor ageing, cash/bank, inventory valuation, fixed assets register.

Statutory Data

GST GSTR-1/3B/2B, e-way summaries, 26AS/AIS, TDS returns, PF/ESI challans, board/partner minutes.

Agreements

Loan & lease agreements, vendor/customer contracts, related party approvals, transfer pricing docs (if any).

Secure data room Page-numbered Cross-referenced

We provide import templates for revenue, purchases, and advances to standardize validations.

Benefits

Advantages of timely Tax Audit

Compliance plus business-grade insights.

Fewer Notices

Clean 3CD & reconciliations reduce mismatch triggers and assessment queries.

Credibility

Bankers & counterparties trust audited numbers for limits, tenders & valuations.

Control Gaps

Early flags on TDS/43B/40(a)/(b) save interest & penalty outgo.

Risks

Disadvantages of not doing/failing the Tax Audit

Avoid avoidable costs and roadblocks.

Penalty Exposure

Penalty u/s 271B may apply (subject to reasonable cause). Interest and disallowances can stack up.

ITR Blockers

Return filing dependencies on audit report can delay ITR and impact refunds.

Higher Scrutiny

Missing/late audit increases selection risk and may trigger disallowances in scrutiny.

If there is a genuine “reasonable cause” for delay/non-furnishing, relief may be available. We evaluate and document cause appropriately.
Calendar

Compliance calendar — plan backwards

Milestones to keep the audit report and ITR on track.

When Milestone Action Flag
T–45 days Kick-off Engagement, data room, trial balance lock date. Start
T–30 days Testing Walkthroughs, sample selections, variance analysis. Review
T–15 days Findings Exception log closure, management notes. Close
T–7 days Sign-off 3CD review, DSC checks, JSON validation. File
3CD

Clause highlights we pay special attention to

Not exhaustive — tailored to your facts.

Clause 13/21

Method of accounting & disallowances (e.g., 40(a), 40(b), 43B) — reconciled with TB & returns.

Clause 18

Depreciation schedule vs FA register; rate mapping & block movements.

Clause 23/24

Related parties & loans/advances; interest & section compliance.

Clause 26/27

TDS/TCS compliance & returns; interest/late fee exposures quantified.

Clause 34

GST interface: turnover, ITC capitalization, expense mapping.

Clause 44

Break-up of expenditure (registered/unregistered suppliers) — ties to GST & books.

Analytics

Variance & ratio analytics we run

Find anomalies early; fix before filing.

Margin Walk

YoY margin, COGS %, freight, discounts; seasonality & channel mix.

Cash vs Accrual

Receipts/payments checks vs ledger; revenue cut-off; advances/retentions.

Bank Tie-out

High-value credits, contra, round-tripping signals, loan covenants mapping.

Adjustments

Typical adjustments/disallowances we watch for

Catching them early reduces interest and queries.

High-risk
  • 40(a)(ia) TDS lapses on contractors, professionals, rent, commissions.
  • 43B unpaid statutory dues; GST/EPF/ESI timing.
  • Capital vs revenue classification; R&D/software capitalization.
Controls
  • Vendor master hygiene; PAN/GSTIN validation.
  • e-Invoice/e-Way mapping with sales register.
  • FAR tagging; WDV reconciliation to prior year.
Engagement

Flexible engagement models

Pick what suits your timelines and scale.

Express

For smaller entities with clean books; quick turnaround with standard testing.

Standard

Full-scope procedures, industry add-ons, analytics & management letter.

Enterprise

Multi-branch, complex revenue, inventory heavy — extended testing & on-site walkthroughs.

Security

Data security & confidentiality

Your data, protected end-to-end.

Controls
  • Restricted access data rooms with audit trails.
  • Password-protected deliverables; DSC handling SOP.
Compliance
  • Confidentiality clauses in engagement letters.
  • Data retention & destruction calendar.
Support

Post-audit support & representation

We stay with you even after filing.

Notice Handling

Audit-linked queries? We prepare reconciliations & responses.

Tax Planning

Adjustments feed into next year’s estimates, advance tax & TDS calendars.

SOPs

Simple checklists for cut-offs, vendor onboarding, and capitalization policy.

FAQ

Common questions on Tax Audit

Relatable icons and clear answers.

The audit report is generally due prior to the ITR due date for audited cases. We confirm exact dates each year per CBDT notifications and your category.

Audit itself doesn’t compute tax, but it reports particulars that can affect your taxable income and may require accounting adjustments before filing ITR.

3CA is for entities already subject to audit under other laws (e.g., Companies Act); 3CB applies where no other statutory audit exists. 3CD is common in both.

If there’s a bona fide “reasonable cause”, penalty may be waived at the Officer’s discretion. We document cause and seek relief as per law and precedents.

Audit doesn’t automatically trigger scrutiny. However, reported exceptions/mismatches can be selection criteria — we address these with evidence and explanations.

We share the signed PDF, utility-generated JSON/XML (as applicable), and a management letter summarizing key points & recommendations.
Get a Call Back

Start your Tax Audit

Share turnover/receipts, sector, branches, and accounting system. We’ll reply with scope & timelines.

We respect your privacy and will contact you only for this request.