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Tax Audit

What is Tax Audit Filing?
Tax audit filing is the process of submitting an audit report to the tax authorities. A tax audit is an examination of a taxpayer's financial records, accounts, and other relevant documents to ensure compliance with the tax laws and regulations of a particular jurisdiction. It is mandatory for a taxpayer to have a tax audit carried out if the sales, turnover or gross receipts of business exceed Rs 2 crore in the financial year. The purpose of a tax audit is to verify the accuracy and completeness of the taxpayer's reported income, deductions, credits, and other tax-related information.
What is a tax audit report?

The person conducting a tax audit has to provide the findings in a report using specified audit forms prescribed by the income tax department. Are you applicable under section 44AB of tax audit?

Tax audit is applicable for the following businesses and professionals:
  • Businesses where the total sales, turnover or gross receipts exceeds Rs 10 crore in the previous year.
  • Cash receipts are below 5% of the gross receipts or turnover
  • Cash payments are below 5% of the aggregate payments
  • Professionals whose gross receipts from profession exceed Rs 50 lakh in the previous year

For more details on the applicability of tax audit for businesses opting presumptive taxation click here.

Purpose of Tax Audit
  • The main purpose of tax audits is to check the errors, mishaps in tax returns and carelessness. This can help to confirm that the taxpayers have paid the accurate number of amounts of tax owed.
  • The process includes a complete analysis of financial records. This can be easily understood with an example like invoices and receipts available to the taxpayer.
Documents Required for Tax Audit Filing
  • Financial statements of a company that acts as the balance sheet of a company.
  • Details of the profit and loss account or any change in a statement for the respective financial year.
  • Documents of income tax returns submitted for a financial year.
  • Complete data on business transactions, disposal of fixed assets; for example- the different agreements, invoices and depreciation schedules.
  • Complete information on the advance payment, loans, and investments done at the time of the respective financial year.
  • All the information on expenses done during the financial year.
  • A copy of TDS certificates and a copy of TDS during the financial year.
Information about prescribed audit forms

The mentioned forms are income tax forms that are specifically utilised for tax audits under the Indian Income Tax Act, of 1961.

  • A Chartered Accountant is responsible for carrying out the audit report under Form 3CA. In such a process, the business accounts of a taxpayer are audited under other laws like the Companies Act, of 2013.
  • Another Form 3CB is important and filled up by the Chartered Accountant. But in this process, the business accounts of a taxpayer are not audited under other laws like the Income Tax Act, of 1961.
  • At last, Form 3CD is required to be filled under section 44AB law of the Income Tax Act, 1961.

Tax Audit Filing on your own can be a cumbersome process as well as time-consuming. Thus, it recommends choosing reliable services that can clear your complete queries and doubts in a small span of time. For a successful Tax Audit Filing, try to choose

How can StartUp Tax Suvidha help you?

In case you plan to or have started a new business, you must register it under the startup registration process. We have a competent team of experts and professionals who can help you register for this service in the most appropriate manner. You can consult the professionals here for any query related to the eligibility of the criteria as well. You will be required to share all your data and thereon will be successfully registered under the startup registration program.

Tax Audit Filing on your own can be cumbersome as well as a time-consuming process. We recommend you log on to to know in detail about the tax filing process. Make this task easier for yourself while you get in touch with the sedulous executives. While following this process, you can clarify all your queries and doubts.

Frequently Asked Questions

Tax audits can be triggered in several ways as random selection; information matching or red flags. You can know more details about it by getting in touch with a professional.

You need to read the audit notice; gather necessary documents; seek professional help; prepare an audit and attend the audit meeting; cooperate and respond promptly.

After a tax audit, the auditor will review the information provided and determine if any adjustments to your tax return.

Tax audits are conducted by tax authorities, such as the Internal Revenue Service (IRS) or government agencies across countries. These agencies are responsible for enforcing tax laws and ensuring that taxpayers are meeting their tax obligations.

Yes, Balance sheet, profit and loss account can be uploaded on the portal. However, the auditor should maintain the physically signed audited report in his records and ensure that there is no difference between physical report and PDF file uploaded.

As per ICAI Council Guidelines dated 8th August, 2008, a member of the Institute in practice shall not accept, in a financial year, more than the 45 tax audit assignments under Section 44AB of the Income-tax Act, 1961.

Date on which the report is physically signed by the Auditor shall be the date of the audit report.

E-filing of ITR and Tax Audit report are independent actions. However, it is advisable to first upload a tax audit report and then file IT returns.