Tax Audit Services in India

What is a Tax Audit?

A Tax Audit is an examination of the accounts of a business or profession carried out under Section 44AB of the Income Tax Act, 1961.
It ensures that the income declared and deductions claimed by the taxpayer are correct, and that the taxpayer is complying with various provisions of the tax laws.

The audit is conducted by a Chartered Accountant (CA), who issues a report in the prescribed format (Form 3CA/3CB and Form 3CD).

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When is Tax Audit Applicable?

Category	Applicability
Business	Total sales, turnover, or gross receipts exceed ₹1 crore (₹10 crore if cash receipts & payments ≤ 5% of total transactions)
Profession	Gross receipts exceed ₹50 lakhs
Presumptive Taxation Scheme – Section 44AD	If income declared is less than 6%/8% of turnover and total income exceeds the basic exemption limit
Presumptive Taxation Scheme – Section 44ADA	If income declared is less than 50% of gross receipts and total income exceeds the basic exemption limit
Presumptive Taxation Scheme – Section 44AE	If declared income is less than deemed income for goods carriages

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Objectives of a Tax Audit

• Ensure proper maintenance of books of accounts
• Report observations on compliance with Income Tax law
• Facilitate accurate computation of taxable income
• Ensure compliance with various provisions such as TDS, deductions, etc.
• Reduce the chances of tax evasion and disputes

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Forms Used in Tax Audit

Form No.	Purpose
Form 3CA	For businesses/professions already required to get their accounts audited under any other law
Form 3CB	For other businesses/professions not required to get accounts audited under any other law
Form 3CD	Detailed statement of particulars forming part of the Tax Audit report

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Tax Audit Due Date

• 31st October of the Assessment Year for taxpayers liable to Tax Audit
• 30th November if transfer pricing provisions under Section 92E are applicable

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Consequences of Not Conducting a Tax Audit

• Penalty under Section 271B: 0.5% of turnover/gross receipts (max ₹1,50,000)
• Increased risk of scrutiny from Income Tax Department

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Documents Required for Tax Audit

• Books of accounts (cash book, ledger, purchase & sales registers)
• Bank statements & passbooks
• Details of fixed assets & depreciation schedules
• GST returns & reconciliations
• TDS returns & challans
• Loan agreements, interest details
• Income tax return copies of earlier years
• Stock records & inventory valuation
• Details of advances, creditors & debtors

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Benefits of Tax Audit by Calculus

• Expert analysis of books of accounts
• Compliance with Income Tax Act & GST regulations
• Timely filing to avoid penalties
• Advisory for tax planning and record-keeping
• End-to-end assistance from audit to filing

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