Section 44AB · Tax audit thresholds
Cross the line, get a CA to sign.
- Business turnover
- ₹1 cr (₹10 cr if 5% cash)
- Profession receipts
- ₹50 lakh
- Audit forms
- 3CA/3CB + 3CD
- Due date
- 30 September
In plain English
Once your business turnover crosses ₹1 crore (₹10 crore if you're mostly cashless) or your professional receipts cross ₹50 lakh, the law makes a tax audit by a Chartered Accountant compulsory. The report is filed in Form 3CA/3CB with 3CD by 30 September.
| Meaning | Number |
|---|---|
| Business turnover | ₹1 cr (₹10 cr if 5% cash) |
| Profession receipts | ₹50 lakh |
What this section covers
Section 44AB makes tax audit by a Chartered Accountant mandatory for: (a) businesses with turnover exceeding ₹1 crore — raised to ₹10 crore where aggregate cash receipts and cash payments each do not exceed 5% of total receipts and payments; (b) professionals with gross receipts exceeding ₹50 lakh; (c) presumptive taxpayers u/s 44AD/44ADA/44AE who declare lower income than the prescribed presumption and whose total income exceeds the basic exemption limit. The audit report is furnished in Form 3CA/3CB along with Form 3CD by 30 September of the assessment year.
The legal text
“Every person,— (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year… get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant…”
Old Act vs New Act
| Aspect | Act, 1961 | Act, 2025 |
|---|---|---|
| Section | 44AB | 63 |
| Topic | Tax audit thresholds | |
| Verdict | Renumbered — thresholds retained | |
| Notes | Restated as Section 63 under the Income-tax Act, 2025. Threshold limits of ₹1 crore / ₹10 crore (5% cash test) for business and ₹50 lakh for professions are retained. Audit report formats (3CA/3CB/3CD) continue under the corresponding Rules. | |
Common confusion
The ₹10 crore turnover relief requires BOTH cash receipts and cash payments to be within 5% — failing either test brings the limit down to ₹1 crore. The 5% test is computed on the aggregate of each, not transaction-wise.
Who should know this
Related sections
Based on the official Income-tax Act, 1961 and the published Income-tax Act, 2025 as available on the Income Tax Department website. Always verify against the published Act and consult a qualified professional.