Tax Audit Quick Reference

Tax audit mandatory for businesses and professionals exceeding specified turnover/receipt limits.

Note: Threshold limits unchanged from old Act. However, CA appointment and form structure revised.

Filing Sequence: Form 26 → Form 66/67 → ITR. All reports must be e-filed.

Key Point: These are separate from regular tax audit (Form 26). Both must be filed if applicable.

Conducted when AO has doubts about account accuracy or complexity. CA is appointed by AO.

Scope: Deep dive into specific areas of doubt identified by Assessing Officer. May cover entire books or targeted sections.

Interest: Simple interest on unpaid tax: 1% per month or part thereof.

• Books of accounts properly maintained and audited
• TDS deducted, deposited, and certificates issued on time
• Depreciation correctly calculated and claimed
• Disallowable expenditure properly identified
• Purchase of fixed assets with supporting documents
• Cash transactions and cash discrepancies reported
• Transfer pricing documentation (if applicable)
• GST compliance and input credit justification
• Related party transactions disclosed and explained
• Working capital management and inventory valuation

⚠ Common Issue: 30% disallowance if TDS not deducted/deposited on eligible expenses.

• Section 44AB → 63: Tax audit section renumbered
• Form 3CA/3CB → Form 26 Part A: Merged into single Part A
• Form 3CD → Form 26 Part B: Detailed audit statement
• Rule 6G → Rule 47: Audit procedure rule updated
• Form 29B → Form 66: MAT audit (for companies)
• Form 29C → Form 67: AMT audit (for non-companies)
• Thresholds Unchanged: Rs 1 Cr / Rs 10 Cr / Rs 50 L limits same
• e-filing Mandatory: All audit reports uploaded electronically

• Books of accounts (ledgers, journals, trial balance)
• Balance sheet & P&L statement with schedules
• Depreciation calculation details (Form 15A equivalents)
• GST filings and ITC reconciliation
• TDS certificates received (Form 16, 16A, 16B)
• Bank statements and reconciliation
• Fixed assets register with cost breakdown
• Transfer pricing documentation (for specified transactions)
• Board resolutions and director attendance
• Audit conducted by outgoing/continuing CA certificate