Section 44AB of the Income-tax Act requires certain taxpayers to have their accounts audited by a chartered accountant and the audit report furnished in the prescribed form. The trigger is turnover or gross receipts crossing a threshold — but the threshold itself depends on whether the taxpayer has also opted for presumptive taxation, which is where most confusion starts.
The base thresholds
For a business, a tax audit is required if total turnover or gross receipts exceed ₹1 crore in the financial year. For a profession, the threshold is gross receipts exceeding ₹75 lakh (raised from ₹50 lakh, subject to the cash-receipts condition below).
The cash-transaction relaxation
The business threshold rises to ₹10 crore if cash receipts and cash payments each don't exceed 5% of total receipts and payments respectively. This is the relaxation most eligible businesses actually rely on, and it needs to be checked every year — a business that qualified for the higher threshold last year on this basis can fall back to the ₹1 crore threshold if its cash proportion rises even slightly.
Where presumptive taxation changes the answer
A taxpayer who has opted for presumptive taxation under Section 44AD (business) or 44ADA (profession) and declares income at or above the prescribed presumptive rate is generally not required to get a tax audit done on that account, even if turnover exceeds the basic threshold — audit is triggered instead only if income is declared below the presumptive rate and total income exceeds the basic exemption limit. This is the interaction that has to be checked together with the turnover figure, not as a separate afterthought: a business well within presumptive-scheme turnover limits can still trigger a mandatory audit purely by declaring profit below the presumptive rate.
What the audit report actually contains
Form 3CD, the detailed statement accompanying the audit report, runs to over 40 clauses covering method of accounting, depreciation, disallowances under Sections 40, 40A and 43B, TDS compliance, GST reconciliation particulars, and more. It's a substantially different document from a statutory audit report — built around tax-law compliance clauses rather than a true-and-fair financial-statement opinion.
Due date
The tax audit report is due one month before the income tax return due date for audit cases — currently 30 September following the financial year, unless extended.
This is general information about the Section 44AB tax audit requirement under the Income-tax Act, current as of the publish date above. Thresholds and forms are periodically amended by the Finance Act; always confirm the figures applicable to the relevant assessment year.