Key Highlights
- Tax audit under Section 162, ITA 2025 (was Section 44AB of ITA 1961)
- Business turnover threshold: Rs 1 crore (cash transactions) or Rs 10 crore (95%+ digital transactions)
- Professional receipts threshold: Rs 50 lakh
- Presumptive scheme opt-out: if a business declares income below presumptive limit, tax audit is required regardless of turnover
- Audit report: Form 3CA/3CB + Form 3CD filed on IT Portal by 30 September of assessment year
- Penalty for non-audit: 0.5% of turnover (max Rs 1.5 lakh)
Legal Reference
Section 162 (tax audit), ITA 2025 | Form 3CA/3CB (audit report), Form 3CD (audit details) | Due date: 30 September of assessment year | Corresponds to Section 44AB of ITA 19611. Who Must Get a Tax Audit?
| Category | Threshold |
|---|---|
| Business (normal) | Turnover/gross receipts exceeding Rs 1 crore |
| Business (95%+ digital transactions — receipts and payments) | Turnover exceeding Rs 10 crore |
| Professional (doctor, CA, lawyer, consultant) | Gross receipts exceeding Rs 50 lakh |
| Business opting for presumptive Section 44AD but declaring income below 8%/6% of turnover | Any turnover (regardless of amount) |
| Professional opting for Section 44ADA but declaring income below 50% of receipts | Any receipts (regardless of amount) |
2. Digital Transactions Threshold: Rs 10 Crore
Businesses where 95% or more of all transactions (both cash received and cash paid) are digital enjoy the enhanced Rs 10 crore threshold. This was introduced to incentivise digital payments. For Tax Year 2026-27, if both receipts and payments are 95%+ digital, the mandatory audit threshold is Rs 10 crore.
3. Forms and Due Dates
| Form | Purpose | Due Date |
|---|---|---|
| Form 3CA | Audit report for companies already required to audit under another law (Companies Act) | 30 September 2027 (for Tax Year 2026-27) |
| Form 3CB | Audit report for taxpayers not required to audit under any other law | 30 September 2027 |
| Form 3CD | Statement of particulars (detailed audit findings) — accompanies 3CA or 3CB | 30 September 2027 |
4. What Does the Tax Audit Report Cover?
Form 3CD requires the CA to report on 44 different particulars including:
- Method of accounting and changes if any
- Valuation of closing stock
- Amounts disallowable under Section 43B (payments to MSME, PF, TDS)
- Payments/receipts in cash exceeding Rs 20,000 (Section 40A)
- Loans and deposits above Rs 20,000 in cash
- Brought forward losses and depreciation
- TDS compliance summary
5. Why TaxClue
A tax audit is a compliance exercise that requires both accounting accuracy and tax knowledge. TaxClue Chartered Accountants conduct tax audits, prepare Form 3CD, and file the report on the IT Portal. Contact us for tax audit services for Tax Year 2026-27.
Disclaimer
This article is for general informational and educational purposes only. It does not constitute legal, financial, or professional tax advice. Readers are advised to consult a qualified Chartered Accountant or tax professional before making any decisions. TaxClue Consultech Pvt Ltd accepts no liability. All case studies and examples in this article are illustrative only and do not represent actual persons or transactions.