Tax Audit Meaning
-A Tax Audit is an audit, made compulsory by the Income Tax Act, if the annual gross turnover/receipts of the assesse exceed the specified limit. Tax audit is conducted in Sec 44AB of the Income Tax Act,1961 by a Chartered Accountant.
-Simply Tax Audit means, an audit of matters related to tax.
Tax Audit Applicability
Presumptive Taxation Scheme – Sec 44AD
Sec 44AB – Audit of Accounts
Tax Audit Report Forms U/s 44AB
Form 3CA: Applicable for Companies
Form 3CB: Applicable for other than Companies
Form 3CD: Parts
Form 3CD: Clauses 1 to 4
> Form 3CD report has 44 clauses which are discussed as follows:
|Name of Assesse
Permanent Account Number (PAN)
Branch should be mentioned along with the name of the assesse.
|4.||Whether the assessee is liable to pay indirect tax like excise duty, service tax, sales tax, goods and services tax, customs duty, etc. if yes, please furnish the registration number or GST number or any other identification number allotted for the same.||
Form 3CD: Clauses 5 to 8
Indicate the relevant clause of section 44AB under which the audit has been Conducted
|Relevant Clause of 44AB||Description|
|Clause (a)||In case the assessee is carrying on business and his total sales, turnover or gross receipts as the case may be, exceeds one crore in the relevant previous year.|
|Clause (b)||If the assessee is carrying on profession and his gross receipts exceed twenty five lakh rupees in the relevant previous year.|
|Clause (c)||If the audit under section 44AB is being conducted by virtue of provisions of section 44AE, 44BB and 44BBB|
|Clause (d)||For audit being conducted by virtue of provisions of section 44ADA|
|Clause (e)||For audit being conducted by virtue of provisions of section 44AD|
Form 3CD: Clause 9
|9 (a)||If firm or Association of Persons, indicate names of partners/ members and their profit sharing ratios.||Obtain a schedule indicating the names of partners/members and their profit sharing ratios.
Please note that details of partners or members during the entire previous year will have to be furnished.
|9 (b)||If there is any change in the partners/members or their profit sharing ratios, the particulars of such change.||
Form 3CD: Clause 11
Form 3CD: Clause 12
|12||Whether the profit and loss account includes any profits and gains assessable on presumptive basis, if yes, indicate the amount and the relevant section (44AD, 44AE, 44AF, 44B, 44BB, 44BBA, 44BBB, Chapter XIIG, First Schedule or any other relevant section.)||Obtain an analysis of revenues and ascertain whether the profits and gains arising from such revenues are assessable on a presumptive basis for the following :
Other relevant sections e.g. section 172 shipping business of non- residents.
Review assessments completed/ prior year tax returns to examine the basis adopted in earlier years for assessing such profits/gains.
It may be noted that the income assessable under these sections is not required to be disclosed, but as the Assesse may carry on other businesses, profits included in the profit and loss account arising from the business covered by these sections is to be disclosed.
Form 3CD: Clause 13
Form 3CD: Clause 14
Clause 14 (a)
Method of valuation of closing stock employed in the previous year.
Clause 14 (b)
Details of deviation, if any, from the method of valuation prescribed under section 145A, and the effect thereof on the profit or loss.
Form 3CD: Clause 15
|15||Give the following particulars of the capital asset converted into stock-in-trade:—
a) Description of capital asset
b) Date of acquisition
c) Cost of acquisition
d) Amount at which the asset is converted into stock-in-trade.
Form 3CD: Clause 16
Amounts not credited to the profit and loss account
Form 3CD: Clauses 17 & 18
|17||Where any land or building or both is transferred during the previous year for a consideration less than value adopted or assessed or assessable by any authority of a State Government referred to in section 43CA or 50C, please furnish:
|18||Particulars of depreciation allowable as per the Income-tax Act,1961 in respect of each asset or block of assets, as the case may be, in the following form :-
Form 3CD: Clause 20
Form 3CD: Clause 21(a)
Please furnish the details of amounts debited to the profit and loss account:-
Form 3CD: Clause 21(b)
Form 3CD: Clause 21(c) to 21(i)
Form 3CD: Clauses 22 to 25
Form 3CD: Clause 26
Form 3CD: Clauses 27 & 28
Form 3CD: Clauses 29 to 29B
Form 3CD: Clauses 30 to 30A
Form 3CD: Clauses 30B to 30C
Form 3CD: Clause 31
Form 3CD: Clause 32
Form 3CD: Clauses 33 & 34
Form 3CD: Clause 35
Form 3CD: Clauses 36 to 38
Form 3CD: Clauses 39 to 41
Form 3CD: Clauses 42 & 43
Form 3CD: Clause 44
UDIN – Unique Document Identification Number
Tax Audit Filling Procedure