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Income Tax Audit Under Section 44AB – Tax Audit for FY 2024-25 and FY 2025-26

Are you a business owner or professional wondering whether you need a tax audit under the Income Tax Act? Let’s break down Income Tax Audit under Section 44AB in a way that’s easy to understand - even if you're not a tax expert. In this guide, we’ll cover:

• What is an Income Tax Audit?
• When is it required?
• What are Form 3CA-3CD and Form 3CB-3CD?
• Tax audit limits for FY 2024-25 and FY 2025-26
• How to file the tax audit report
• What’s the tax audit due date?

What is Income Tax Audit?

An Income Tax Audit is a check of your books of accounts by a Chartered Accountant (CA), as required under Section 44AB of the Income Tax Act. The purpose is to ensure that you’ve accurately reported your income and complied with tax laws.

The CA verifies the correctness of:

• Sales, purchases, expenses, and profits
• Statutory dues (like GST, TDS)
• Books of accounts and financial statements

After the audit, the CA files an audit report electronically using Form 3CA-3CD or Form 3CB-3CD.

What is Section 44AB?

Section 44AB of the Income Tax Act, 1961 makes it mandatory for certain businesses and professionals to get their accounts audited by a Chartered Accountant and submit the tax audit report in a prescribed format before the due date. 

Section 44AB of Income Tax Act & Who Is Required to Audit?

Tax Audit Limit for FY 2024-25 & FY 2025-26

Here’s a breakdown of who needs to get a tax audit:

Category	Audit Required If Turnover/Receipts Exceed
Business (Not opting for 44AD)	₹1 crore (normal), ₹10 crore if cash transactions ≤ 5%
Business (under 44AD)	Income declared is less than 8%/6% and above basic exemption
Professionals (under 44ADA)	₹50 lakh gross receipts, Limit rises to ₹ 75 lakh if cash transactions are ≤ 5%
Presumptive Taxation (44AD/44ADA)	If profit declared below the prescribed rate or opted out, and total income exceeds basic exemption

Which Forms Are Used in Tax Audit? | What Are the Forms 3CA-3CD and 3CB-3CD?

The Chartered Accountant uses either Form 3CA-3CD or Form 3CB-3CD, depending on whether your accounts are audited under any other law (like Companies Act).

Form 3CA-3CD

For taxpayers already audited under other laws (like Companies Act)

Consists of:

• Form 3CA (Audit Report)
• Form 3CD (Detailed Statement with 44 clauses)

Form 3CB-3CD

For taxpayers whose audit requirement is only under Section 44AB ( Income Tax Audit )

Consists of:

• Form 3CB (Audit Report)
• Form 3CD (Detailed Statement with clauses)

These forms are filed electronically through the Income Tax e-Filing Portal.

Income Tax Audit Report Format

The audit report format is standard and issued by the CBDT. It includes:

• Details of the taxpayer
• Nature of business/profession
• Details of expenses, disallowances, loans, and deductions
• Compliance with TDS, GST, and other tax laws
• Profit and loss summary

The CA fills these details in Form 3CD, which is part of the tax audit report.

You can download the Income Tax Audit Report PDF format or view sample reports on the e-Filing portal or CA association websites.

Due Date for Filing Tax Audit Report – FY 2024-25

Category	Due Date
Audit Report Filing	30th September 2025 (for AY 2024-25)
Income Tax Return Filing	31st October 2025 (if audit applicable)

 

Late filing of audit reports can attract a penalty under Section 271B – up to ₹1.5 lakh or 0.5% of turnover.

Easy Steps for Smooth Audit Process

• Track your turnover: Know when you cross ₹ 1 crore or ₹ 50 lakh.
• Monitor cash vs. digital receipts/payments (≤ 5% helps you avoid audit).
• Get a qualified CA and plan your audit well before 30th September.
• File Form 3CA/3CB and 3CD electronically, signed by your CA.
• Submit ITR by 31st October (or extended due date), attaching Form 3CD. 

How to File Tax Audit Report (Step-by-Step)

• Login to Income Tax e-Filing Portal
• Go to e-File > Income Tax Forms > File Income Tax Forms
• Select Form 3CA/3CB-CD and assign it to your Chartered Accountant
• CA will fill and upload the audit report
• You’ll receive a notification and need to approve the submission
• Once approved, the audit report is successfully filed

Why Is Tax Audit Important?

• Avoid penalties and notices from the tax department
• Ensure correct claim of expenses and deductions
• Useful for bank loans, tender filings, and visa applications
• Builds credibility and transparency in your business

What Happens If You Miss to file Audit report?

Failing to get an audit or file forms by the deadline may result in Section 271B penalty:

• 0.5% of turnover/receipts, capped at ₹ 1.5 lakh
• Penalty may be waived if you can prove a reasonable cause (like illness, natural disaster) 

FAQs on Income Tax Audit

What is Form 3CA and 3CB?

Form 3CA is for businesses audited under other laws (like Companies Act). Form 3CB is for those not audited under other laws.

What is the audit limit for FY 2024-25 under Section 44AB?

₹1 crore for business, ₹10 crore if cash transactions are under 5%, and ₹50 lakh for professionals.

What if I miss the tax audit due date?

You may face a penalty of ₹1.5 lakh or 0.5% of turnover under Section 271B.

Where can I download the tax audit report in PDF format?

You can download it from your CA or the Income Tax portal after filing or Click hear

What is Form 3CD?

Form 3CD is a detailed statement containing 44 clauses covering business details, tax compliance, deductions, and financials.

Is Income Tax Audit applicable for freelancers?

Yes, if gross receipts exceed ₹50 lakh or if they opt out of presumptive tax under Section 44ADA.

Who can conduct an income tax audit?

Only a Chartered Accountant (CA) can conduct an income tax audit and file Form 3CA/3CB-3CD.

Do presumptive scheme taxpayers need audit?

Only if profit declared below presumed rate and total income is above basic exemption or if they exit the scheme and meet criteria for five years 

Final Thoughts

Income Tax Audit under Section 44AB isn’t just for big businesses. Even professionals and small businesses must stay alert to audit limits, due dates, and required forms like 3CA-CD or 3CB-CD. Filing your income tax audit report on time through the Income Tax login portal ensures smooth compliance and avoids penalties.

If you’re close to the threshold, speak to your CA and plan in advance to avoid last-minute rush.