Yes, a tax audit under Section 44AB is compulsory even if the accounts are already audited under:
- Other laws(e.g., Companies Act, 2013, GST, RBI regulations)
- Other provisions of the Income Tax Act(e.g., Section 44DA for non-residents)
However, the compliance process differs based on whether another audit has been conducted.
1. When Accounts Are Audited Under Other Laws (e.g., Companies Act)
- Form 3CA(Audit Report) must be filed by a CA.
- Form 3CD(Detailed Tax Audit Report) is attached to Form 3CA.
- Due Date: 30th September(or 31st October for transfer pricing cases).
Example:
A private limited company with ₹5 crore turnover must:
✔ Conduct a statutory audit (under Companies Act).
✔ Also file Form 3CA + 3CD for tax audit.
2. When Accounts Are Audited Under Other Income Tax Provisions (e.g., Section 44DA for Non-Residents)
- Form 3CEB(for international transactions) may be required.
- Form 3CB + 3CDstill applies if Section 44AB criteria are met.
Example:
A foreign company receiving royalties in India (audited under Section 44DA) must also comply with Section 44AB if turnover exceeds ₹1 crore.
3. Exceptions Where Tax Audit May Not Apply
- Presumptive Taxation (Sections 44AD/44ADA/44AE): No audit if income declared at prescribed rates.
- Turnover Below Threshold: No audit if below ₹1 crore (₹10 crore for low-cash businesses) or ₹50 lakh (professionals).
4. Penalty for Non-Compliance
- Failure to File Tax Audit Report:
- ₹1.5 lakhor 5% of turnover (whichever is lower).
- Additional scrutiny risk.
![Compulsory Tax Audit of Accounts [Section 44AB]](https://incometaxmanagement.in/wp-content/uploads/2023/09/Compulsory-Tax-Audit-of-Accounts-Section-44AB-1024x683.jpg)
![General Deductions [Section 37(1)]](https://incometaxmanagement.in/wp-content/uploads/2023/09/General-Deductions-Section-371-1024x683.jpg)
