A Tax Audit Report is a document prepared by a qualified Chartered Accountant (CA) after conducting a tax audit under Section 44AB of the Income Tax Act, 1961. It contains detailed information about a taxpayer’s income, expenses, compliance with tax laws, and financial records for a specific financial year. This report is mandatory for certain categories of taxpayers, especially businesses and professionals whose turnover or gross receipts exceed the prescribed limit.
As per current rules, a tax audit is required if:
- A business has a turnover of more than ₹1 crore (or ₹10 crore if cash transactions are minimal), or
- A professional earns more than ₹50 lakhs in a financial year.
The Tax Audit Report must be submitted electronically using Form 3CA/3CB along with Form 3CD, which provides specific disclosures like depreciation, payments to related parties, loans, deductions claimed, and TDS compliance. The primary objective is to ensure accuracy in income reporting and prevent tax evasion.
In practical terms, small business owners and entrepreneurs must take this report seriously to avoid penalties and scrutiny. Timely filing of the Tax Audit Report strengthens a company’s credibility, supports smoother income tax assessments, and is often needed when applying for business loans or government registrations.
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