Tax Audit Under Section 44AB
A tax audit verifies that your reported income, deductions, and financial records hold up under Income Tax Act scrutiny - required once your turnover or gross receipts cross the Section 44AB threshold. We handle the audit, the documentation, and the filing, so you stay compliant and penalty‑free.
VERIFYING INCOME, DEDUCTIONS & RECORDS
Three thresholds, one obligation
Section 44AB of the Income Tax Act, 1961 sets out exactly when a tax audit is required - for every individual, HUF, partnership, LLP, or company that crosses the line.
More than a compliance checkbox
| Objective | Purpose |
|---|---|
| Ensure Accuracy of Financial Records | Confirms that accounts are properly maintained and reflect true income. |
| Verify Compliance with Income Tax Law | Ensures the assessee follows provisions of the Income Tax Act. |
| Identify Taxable Income Clearly | Helps in computing correct taxable income and tax liability. |
| Prevent Tax Evasion | Detects misreporting, false claims, or overstatements of deductions. |
| Support Transparency and Accountability | Builds trust between businesses and tax authorities. |
| Assist in Tax Assessments | Helps tax authorities with quicker and more accurate assessments. |
| Promote Voluntary Compliance | Encourages businesses to stay within the law and avoid penalties. |
Only a CA, and only with proper books
Under Section 44AB, only a certified Chartered Accountant has the authority to conduct a tax audit - examining your accounts, assessing compliance, and preparing the audit report within the required time. None of that works without accurate bookkeeping. A tax audit typically draws on:
Importance of Maintaining Proper Books of Accounts
For an effective tax audit, it is necessary to maintain accurate books. The following records are commonly required:
Good bookkeeping simplifies the income tax audit process and ensures the audit is completed without complications.
Small mistakes that trigger big notices
Incorrect classification of income
Delay in submission of forms
Non‑compliance with TDS/TCS provisions
Mismatch in reported figures
Ignoring recent changes to Section 44AB
When it's due, and what it costs to miss
Tax audit reports must be submitted by 30th September of the relevant assessment year. Missing this deadline triggers a penalty under Section 271B equal to 0.5% of total sales or gross receipts, or ₹1,50,000 - whichever is lower. Reasonable cause, such as natural calamities or unavoidable circumstances, may result in the penalty being waived.