Taxation

Tax Audit under Section 44AB: Turnover Limits, Requirements, and Penalties

A detailed guide on tax audit requirements under Section 44AB of the Income Tax Act. Learn about turnover limits, due dates, and compliance.

18 Jun 2026

2 min read

Kaagzaat Editorial

Introduction: The Regulatory Audit Requirement

Under the Income Tax Act, 1961, businesses and professionals exceeding specified turnover thresholds must have their accounts audited by a practicing Chartered Accountant.

This audit, conducted under Section 44AB, ensures that books of accounts are kept correctly, deductions are claimed accurately, and taxable income is reported truthfully. This guide explains the current limits, rules, and timelines.

1. Current Turnover Limits for Tax Audit (FY 2025-26)

Business: A tax audit is mandatory if the annual gross turnover exceeds ₹1 Crore. However, this limit is extended to ₹10 Crores if cash transactions (receipts and payments) are kept below 5% of total transactions.

Professionals: A tax audit is mandatory if gross receipts exceed ₹50 Lakhs (or ₹75 Lakhs if cash receipts are below 5% under presumptive taxation Section 44ADA).

2. Penalties for Late Filing

Failing to get accounts audited or submit the audit report by the due date (usually September 30 of the assessment year) attracts a penalty under Section 271B.

The penalty is equal to 0.5% of the turnover/gross receipts, up to a maximum cap of ₹1,50,000.

Frequently Asked Questions

1. What is the due date to file a tax audit report?

The due date is September 30 of the relevant Assessment Year.

2. Who can conduct a tax audit under Section 44AB?

Only an active, practicing Chartered Accountant (CA) or a firm of CAs can conduct a tax audit and issue the audit report.

3. What are the main forms used for tax audits?

Form 3CA (for entities that are already audited under another law, like companies) and Form 3CB (for other entities), along with the detailed Form 3CD statement.

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Disclaimer: The information provided in this guide is for educational purposes only and does not constitute formal legal or financial advice. Please consult a qualified professional before making business decisions.