₹1cr business / ₹10cr digital / ₹50L profession thresholds. Form 3CA/3CB + 3CD CA audit. F&O traders. Penalty 0.5% or ₹1.5L. Sep 30 + Oct 31 deadlines.
44AB TAX AUDIT THRESHOLDS: (1) BUSINESS: turnover over ₹1cr. (2) BUSINESS (95%+ digital): turnover over ₹10cr. (3) PROFESSION: gross receipts over ₹50L. (4) PRESUMPTIVE (44AD) OPT-OUT: audit if income claimed lower than deemed + total over basic exemption. (5) F&O: turnover over ₹10cr (digital) / ₹1cr. AUDIT BY: Chartered Accountant. FORMS: 3CA/3CB + 3CD. DUE DATE: Sep 30 (audit report) + Oct 31 (ITR). STRATEGIC: cross threshold = CA audit mandatory.
TAX AUDIT FORMS: (1) FORM 3CA: audit report when accounts ALREADY audited under another law (companies). (2) FORM 3CB: audit report when NOT audited under other law (proprietorship). (3) FORM 3CD: DETAILED STATEMENT (40+ clauses) — particulars of business, deductions, TDS compliance, loans, payments. CA CERTIFIES. (4) Filed online before ITR. KEY: 3CD is comprehensive — covers Section 40A(3) cash payments, TDS compliance, related party, depreciation, etc. STRATEGIC: maintain books for CA audit.
F&O TAX AUDIT (44AB): (1) F&O TURNOVER (absolute P&L sum) over ₹10cr (digital) — audit. (2) UNDER ₹10cr but presumptive opt-out + loss: may need audit. (3) Most retail F&O traders BELOW ₹10cr — no audit if not opting presumptive incorrectly. (4) 2021 clarification eased small trader audit. EXAMPLE: ₹5cr F&O turnover (digital), ₹2L profit. (a) Below ₹10cr digital threshold. (b) No mandatory audit. (c) File ITR-3 with Schedule BP. STRATEGIC: most retail traders avoid audit. Large turnover (over ₹10cr) or presumptive issues: CA audit.
44AB PENALTY (Section 271B): (1) FAILURE to get audit / submit report: 0.5% of turnover OR ₹1,50,000 (whichever LOWER). (2) EXAMPLE: ₹2cr turnover, no audit. (a) 0.5% × ₹2cr = ₹1L. (b) vs ₹1.5L cap. (c) Penalty ₹1L (lower). (3) REASONABLE CAUSE: penalty may be waived. (4) PLUS: ITR may be defective. STRATEGIC: get audit done if threshold crossed. Penalty + scrutiny risk. Engage CA well before Sep 30 deadline.
44AB STRATEGY: (1) MONITOR turnover/receipts vs thresholds. (2) ₹1cr business / ₹10cr digital / ₹50L profession. (3) DIGITAL receipts raise business threshold to ₹10cr. (4) MAINTAIN books year-round (Section 44AA). (5) ENGAGE CA early (audit takes time). (6) FORM 3CD compliance: TDS, cash payments (40A(3)), related party. (7) F&O: turnover calculation + threshold. (8) PRESUMPTIVE: avoid audit if eligible (44AD/44ADA). (9) DUE DATES: Sep 30 audit + Oct 31 ITR. (10) PENALTY 0.5%/₹1.5L avoidable. STRATEGIC: cross threshold = mandatory CA audit. Plan books + CA engagement. Presumptive avoids audit for eligible small business.