Company Audit


  • Section: Section 44AB of the Income Tax Act, 1961

  • Purpose: To ensure that companies are maintaining proper books of accounts and complying with the income tax laws

  • Applicability: Companies, including foreign companies, with a turnover of more than Rs. 1 crore in the financial year are required to get their accounts audited by a practicing Chartered Accountant (CA). For businesses carrying out profession or business, the threshold limit is Rs. 50 lakhs.

  • Timeline: The tax audit must be completed before the due date of filing the income tax return, which is generally September 30th of the assessment year.

  • Exemption: Certain types of companies and businesses are exempt from tax audit requirements, such as companies with a turnover below the threshold limit or those opting for the presumptive taxation scheme.

  • Penalty: If a company fails to get their accounts audited, they may be subject to a penalty of 0.5% of the total sales or turnover, up to a maximum of Rs. 1,50,000.

  • Due date: The due date for filing the tax audit report is September 30th of the assessment year.

  • Forms: Form 3CA and Form 3CB are used to file tax audit reports by the CA. Form 3CD is used to provide details of the audit findings and recommendations.

  • Reporting Authority: The tax audit report is filed with the Income Tax Department and the audit findings are also reported to the Board of Directors of the company.


Made With Sitelium