Neha Moolchandani

🏢 When Does Tax Audit Become Mandatory? Every taxpayer doesn’t need a tax audit. But if your turnover or income crosses certain limits — it’s compulsory. Let’s decode it section-wise 🧵👇 1. Section 44AB – The Tax Audit Section ➡️Tax audit = Examination of your books of accounts by a Chartered Accountant (CA) to ensure correctness of income, deductions & compliance. ➡️Applies to 👉 Businesses, Professionals & Presumptive taxpayers. 2. For Businesses (Sec 44AB(a)) ✅ Audit mandatory if turnover > ₹1 crore BUT — the limit increases to ₹10 crore if: • Cash receipts ≤ 5% of total receipts, and • Cash payments ≤ 5% of total payments 💡 So, if you operate almost fully via digital mode, you get higher limit! 3. For Professionals (Sec 44AB(b)) ➡️If gross receipts > ₹50 lakh in a financial year → Tax Audit is mandatory 4. Presumptive Taxation (Sec 44AD, 44ADA, 44AE) 🔹 Sec 44AD (Business) If you declare profit < 6% (digital) or < 8% (cash) of turnover & income > basic exemption limit → Audit compulsory 🔹 Sec 44ADA (Professionals) If you show profit < 50% of receipts & income > basic exemption → Audit required 5. Transport Business (Sec 44AE) ➡️If you own up to 10 goods vehicles — presumptive profit = ₹1,000 per ton per month. ➡️If you declare less than this → Audit mandatory 6. Business Loss or Low Profit Cases ➡️Even if turnover < limits, but you declare loss or profit below presumptive rate, and your income exceeds exemption limit → Audit is required. 7. Penalty for Non-Compliance (Sec 271B): Failing to get audit done = Penalty of 👉 0.5% of turnover or ₹1,50,000, whichever is lower. 8. ✅ Takeaway: Tax audit ensures compliance & accuracy. Maintain books properly, avoid last-minute rush, and file reports on time!

Last Dates of Issuance of Notice u/s 73 & 74 for Each Year Starting From FY 2017-18 30th Sep 2025 is the last date for - - Notice u/s 73 for FY 2021-22 & - Notice u/s 74 for FY 2019-20.