Section 44AB- Audit of Accounts of certain persons carrying a business or profession

Last Updated On: June 25, 2020, 1:53 p.m.
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Section 44AB (Audit of accounts of certain persons carrying on business or profession)

Every Person –

  • carrying business, if his total sales/ turnover/ gross receipts, exceeds Rs.1 crore in a year.

However, the limit shall be Rs.5 crores in case of person whose-

  1. an aggregate of all amounts received including the amount received for sales/ turnover/ gross receipts during the previous year, in cash, does not exceed 5% of the said amount, and
  2. an aggregate of all payments made including the amount incurred for expenditure, in cash, during the previous year does not exceed 5% of the said payment
  • carrying on profession, if his gross receipts in profession exceed Rs.50 lakhs in a year,
  • carrying on the business, if the profits are deemed u/s 44E or 44BB or 44BBB, and he has claimed his income to be lower than the profits so deemed to be the profits of his business, in a year,
  • carrying on the profession, if the profits from the profession are deemed to be the profits u/s 44ADA and he has claimed such income to be lower than the profits so deemed to be the profits of his profession and his income exceeds the maximum amount which is not chargeable to income-tax in the previous year,
  • carrying on the business, if the provisions of section 44AD(4) are applicable and his income exceeds the maximum amount which is not chargeable to income-tax in the previous year 

needs to get his accounts of the 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.

Report of an audit of accounts to be furnished under section 44AB

As per Rule 6G of the Income Tax Act, the report of an audit of the accounts of a person required to be furnished under section 44AB shall—

  • In Form 3CA - In the case of a person who carries on business or profession and who is required by or under any other law to get his accounts audited
  • In Form 3CB - In the case of a person who carries on business or profession, but not being a person referred above.

 

The particulars which are required to be furnished under section 44AB shall be in Form No. 3CD

 

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