Tax Audit Services in Delhi | Section 44AB / Section 63 Income Tax Audit

In a Nutshell: Who Needs a Tax Audit and What Changes in 2026-27

A tax audit is a CA’s audit of a taxpayer’s books for income-tax purposes, reported in prescribed forms before the return is filed. For FY 2025-26 (AY 2026-27) it is governed by Section 44AB of the Income-tax Act, 1961; from Tax Year 2026-27 it moves to Section 63 of the Income-tax Act, 2025, with the same core limits. Startup Advisory handles tax audits for proprietors, firms, LLPs and companies.

Business: turnover above ₹1 crore — or above ₹10 crore if cash receipts and cash payments are each within 5% of the totals.
Profession: gross receipts above ₹50 lakh.
Presumptive cases: declaring profit below the presumptive rate (44AD/44ADA; Sections 58/61 of the 2025 Act) when income exceeds the basic exemption limit.
Forms: Form 3CA or 3CB with Form 3CD under the 1961 Act; a single Form 26 for Tax Year 2026-27 audits.
Due date: one month before the ITR due date — 30 September normally; for AY 2026-27 CBDT extended it to 21 October 2026.
Penalty: for years under the 1961 Act, Section 271B — 0.5% of turnover or receipts, capped at ₹1.5 lakh, unless reasonable cause is shown.

Reviewed by CA Neeraj Rohilla, FCA — Chartered Accountant, Startup Advisory, Saket, New Delhi.

The Tax Audit Is Not a Formality. Form 3CD Is a Disclosure Document.

A tax audit report is more than a signature on accounts. Form 3CD (and from Tax Year 2026-27, Form 26) asks the auditor to report dozens of specific particulars — payments to related parties, TDS defaults, cash transactions above limits, MSME dues paid late, deemed income, and more — and the department uses those disclosures to select cases for scrutiny. Getting it right protects you; getting it wrong hands the assessing officer a ready-made list.

Who needs a tax audit

Taxpayer	Audit required when	Notes
Business (default)	Turnover, sales or gross receipts exceed ₹1 crore	Applies even if the business made a loss
Business with low cash	Turnover exceeds ₹10 crore	Only if cash receipts and cash payments are each 5% or less of the totals; a non-account-payee cheque or draft counts as cash
Profession	Gross receipts exceed ₹50 lakh	Doctors, lawyers, architects, consultants, IT professionals and other notified professions
Presumptive business (44AD / Section 58)	Profit declared below the presumptive rate and income above the basic exemption limit	Also where a business opts out of the scheme within the lock-in period
Presumptive profession (44ADA / Section 61)	Profit declared below 50% of receipts and income above the basic exemption limit	—

The limits are the same under Section 63 of the Income-tax Act, 2025: ₹1 crore for business, ₹10 crore with the 5% cash conditions, and ₹50 lakh for professions, with presumptive cases covered where declared profit is lower than the deemed profit. Our tax audit applicability guide works through the edge cases.

1961 Act or 2025 Act — which applies to your audit

Year	Law	Section	Forms	Due date
FY 2025-26 (AY 2026-27)	Income-tax Act, 1961	44AB	Form 3CA or 3CB, with Form 3CD	21 October 2026 (extended from 30 September 2026)
Tax Year 2026-27 onwards	Income-tax Act, 2025	63	Form 26	One month before the return due date — 30 September 2027 for Tax Year 2026-27

Form 3CA is used where the accounts are already audited under another law, such as a company under the Companies Act; Form 3CB is used for everyone else. Under Section 63(4) of the 2025 Act, as under the old law, an audit under another law suffices if it is completed and reported by the specified date along with the tax audit report.

What we do

Applicability check: turnover computation, cash-ratio test, presumptive options and whether an audit is required at all.
Pre-audit clean-up: GST turnover reconciled to books, TDS defaults identified, Section 43B and MSME payment timelines tested, related-party schedule prepared.
Audit and reporting: verification of books and the particulars, Form 3CD or Form 26 prepared clause by clause, UDIN generated and report uploaded.
Taxpayer acceptance: the report counts only once you accept it from your own e-filing login — we track it to acceptance.
Return filing: audited ITR filed by the due date, with the computation consistent with the audit report.

For deadline news, see our post on the AY 2026-27 tax audit extension. Companies that also need a statutory audit can have both planned together.

Related Audit & Assurance Services

Statutory Audit →Annual statutory audit of companies under the Companies Act, 2013 and of LLPs above the audit limits — with CARO 2020 reporting.

Internal Audit →Risk-based internal audit under Section 138 — process reviews, control testing and quarterly reports to the board or audit committee.

Fixed Assets Audit →Fixed asset register review, capitalisation, depreciation, CWIP and title checks — aligned to CARO 2020 clause 3(i).

Financial Due Diligence →Buy-side and sell-side financial due diligence for acquisitions, mergers, JVs and lenders — quality of earnings, net debt, working capital.

See all audit & assurance services

Frequently Asked Questions

A business with turnover above ₹1 crore (above ₹10 crore if cash receipts and cash payments are each within 5% of the totals), a professional with gross receipts above ₹50 lakh, and presumptive taxpayers who declare profit below the deemed rate while their income exceeds the basic exemption limit.

From Tax Year 2026-27, the tax audit is governed by Section 63 of the Income-tax Act, 2025 instead of Section 44AB. The thresholds stay the same, the report is due one month before the return due date, and the separate Forms 3CA, 3CB and 3CD are consolidated into a single Form 26. Audits for FY 2025-26 still use the 1961 Act and the old forms.

CBDT extended the due date for audit reports for AY 2026-27 from 30 September 2026 to 21 October 2026, and the return due date for those taxpayers from 31 October 2026 to 21 November 2026. Transfer-pricing cases were not covered by that extension.

For years governed by the Income-tax Act, 1961, Section 271B provides a penalty of 0.5% of turnover or gross receipts, capped at ₹1.5 lakh. It is not levied where the taxpayer shows reasonable cause for the failure. A return filed without a required audit report can also be treated as defective.

Yes, if its turnover crosses the tax audit limit. The company files Form 3CA (or, from Tax Year 2026-27, Form 26) relying on the statutory audit, together with the detailed particulars in Form 3CD or Form 26. The two can be done together by the same auditor.

Turnover, not profit, is the trigger for a business with turnover above the limit. Even a loss-making business above ₹1 crore (or ₹10 crore where the cash conditions are met) needs an audit. Filing on time with the audit report also preserves the right to carry the loss forward.

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