This book is a comprehensive and updated treatise meticulously designed to address all aspects of tax auditing under Section 44AB of the Income-tax Act. Incorporating the latest amendments effected by the Finance Act 2025, this Edition provides in-depth guidance on every clause of Form No. 3CD. Special attention is devoted to the newly revised investment and turnover thresholds for MSMEs and how these affect reporting under Clause 22. The book offers auditing insights, compliance checklists, practical FAQs, and detailed explanations of statutory provisions. Its hallmark features include a structured analysis for each Form No. 3CD clause—covering what the clause mandates, possible pitfalls, relevant case law references, checklists, e-filing steps, and suggested audit documentation. In addition, multiple 'Tax Audit Reckoners' provide quick-reference tools for specific audits (e.g., cash transactions, sale of immovable property, share capital, and loans/deposits).
This book is intended for the following audience:
- Chartered Accountants and Tax Professionals – Seeking in-depth guidance on the latest tax audit procedures, documentation standards, and reporting nuances
- Business Owners and Finance Executives – Looking to understand the mandatory audit requirements under Section 44AB and how to comply effectively
- Legal Practitioners – Who handle tax litigation or advisory and need clarity on the latest statutory requirements and ICAI perspectives
- Students and Academics – Offering a concise yet detailed resource to gain mastery in practical aspects of tax audits
The Present Publication is the 17th Edition | 2025, amended by the Finance Act 2025. This book is authored by CA. Srinivasan Anand G. with the following noteworthy features:
- [Complete Coverage of Form No. 3CD] Every clause is dissected to clarify mandatory disclosures, statutory references, linkages with other clauses, and relevant ICAI guidance
- [Latest Amendments Addressed] Incorporates the Finance Act 2025, including revised MSME thresholds impacting audit reporting under Clause 22
- [Structured Clause-by-Clause Analysis] Clearly explains what each clause requires (and does not require), the nature of the auditor's reporting responsibility, and the supporting documentation needed
- [Practical Checklists and Reckoners] Offers multiple 'Tax Audit Reckoners' for focused areas such as cash transactions, sale of immovable property, share capital, and loans/deposits
- [Compliance-focused Approach] Guides auditors and assessees on how to fill details in the e-filing utility with step-by-step reporting instructions
- [Interpretational Guidance and FAQs] Addresses common ambiguities in the tax audit sphere, providing practical examples and frequently asked questions to clarify practical scenarios
- [Comprehensive Reference to Other Laws and Provisions] Includes references to related statutory provisions (e.g., MSMED Act, ICDS, TDS obligations) that integrate with tax audit procedures
- [Audit Documentation Tools] Highlights recommended working papers, disclaimers, and qualifications for robust documentation and risk mitigation
- [Updated for Non-Applicable/Replaced Clauses] Details clauses that have become obsolete or irrelevant for Assessment Year 2025–26 (e.g., DDT, certain central excise or service tax clauses)
The content is methodically laid out in 62 chapters, each dedicated to a specific component of Section 44AB and Form No. 3CD, such as:
- Section 44AB Basics
- Who must get audited, turnover thresholds, profession vs. business distinctions (Chapters 0 to 5)
- Deep Dive into Turnover/Gross Receipts
- Interpretation, calculation, and compliance obligations (Chapter 6)
- Obligations and Preparation
- Financial statements, forms (3CA, 3CB, 3CD), and overarching responsibilities (Chapters 7 to 11)
- Clause-by-Clause Commentary on Form 3CD (Chapters 12 to 62)
- Clause 1 to Clause 8A – Basic information about the assessee, status, previous year, relevant sections under 44AB, and new tax regime options
- Clause 9 to Clause 29B – Detailed requirements for reporting partnerships, nature of business, books of accounts, method of accounting and valuation, deemed profits, inadmissible expenses, and property transactions at lower stamp duty value
- Clause 30 to Clause 44 – Covers special areas such as GAAR, secondary transfer pricing, thin capitalisation, receipt/payments in cash above specified limits, TDS compliance, quantitative details, and the final Clause 44 on GST-related reporting
- Tax Audit Reckoners
- Swift references for auditing cash transactions, sale of immovable property, share capital, and loans/deposits
- Tables delineating the clauses not applicable to certain assessees (e.g., those following the cash basis of accounting)
The structure of the book is as follows:
- Introductory Chapters (0–5) – Lay the groundwork for understanding the legal framework (Section 44AB), defining who is covered and the turnover-linked vs. non-turnover-linked obligations
- Core Explanatory Chapters (6–11) – Discuss how to compute turnover or gross receipts, highlight the essential obligations cast by Section 44AB, and guide the reader through the preparation of financials and relevant forms (3CA, 3CB, 3CD)
- Clause-by-Clause Analysis (12–62) – Each clause begins with a quick summary
- What the Clause Requires
- What it Does Not Require
- Auditor's Reporting Responsibility
- Statutory Provisions & ICAI's Views
- Documentation, MRL, and Linkages
- Checklist
- Guidance on E-Filing Utility
- Precautions, Disclaimers, and FAQs
- Reckoners & Special Audits – Interspersed throughout are 'Tax Audit Reckoners' that compile crucial provisions into quick-glance charts/tables for specific scenarios (cash transactions, share capital, immovable property, etc.)
- Appendices and Notable Omissions – Clarify redundant clauses or those inapplicable to certain periods (e.g., older excise and service tax audits, dividend distribution tax)
