Tax audit under section 44AB: applicability thresholds
Turnover limits, the cash-transaction test, and where presumptive taxation interacts with the audit requirement.
Turnover limits, the cash-transaction test, and where presumptive taxation interacts with the audit requirement. This note is one of a series of factual compliance notes published by Lalit Mohan Tyagi & Co.; it is general information, not advice for a specific person or entity. Read the full note below, or see the compliance calendar for the underlying due dates.
Section 44AB requires a person carrying on business to have accounts audited where total sales, turnover or gross receipts exceed the prescribed limit in the previous year. A higher limit applies where cash receipts and cash payments each remain within the small proportion of total receipts and payments specified in the section.
For a person carrying on a profession, the audit requirement is triggered at a lower gross receipts threshold, and the cash-transaction relaxation does not apply.
The interaction with presumptive taxation is the point most often missed. A person who has opted into a presumptive scheme and later declares income lower than the presumptive rate, while having total income above the basic exemption limit, becomes liable to audit irrespective of turnover.
The report is furnished in Form 3CA where the accounts are already audited under another law, and in Form 3CB otherwise. Both are accompanied by the statement of particulars in Form 3CD.
The due date for furnishing the report is 30 September following the financial year. The return itself is due a month later where the audit applies.
Last reviewed 26 August 2026.