Is an Audit Required? – Checklist for Tax Audit Applicability for FY 2024–25
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Every taxpayer, especially business owners and professionals, must determine whether a tax audit under Section 44AB of the Income Tax Act is applicable for the financial year 2024–25. With evolving thresholds and digital compliance norms, here’s a complete checklist with examples to guide your audit decision.
❓ What is a Tax Audit?
A Tax Audit is a detailed review of your financial records and compliance, mandated under Section 44AB of the Income Tax Act, 1961. It ensures:
✔️ Accuracy of income and deductions
📚 Proper maintenance of books
🕒 Timely filing of returns
✅ Checklist for Audit Applicability – FY 2024–25
🏢 Business (Non-Presumptive) – Section 44AB(a)
| Criteria | Audit Requirement |
|---|---|
| Turnover ≤ ₹1 crore | Not required |
| Turnover > ₹1 crore and ≤ ₹10 crore | Required only if cash receipts/payments > 5% |
| Turnover > ₹10 crore | Always required |
📌 Example 2: XYZ Pvt. Ltd. has ₹12 crore turnover. ➡ Audit Required
🧾 Presumptive Taxation (Section 44AD) – Small Businesses
| Criteria | Audit Requirement |
|---|---|
| Turnover ≤ ₹2 crore, profit ≥ 8% (cash) / 6% (digital) | Not required |
| Turnover up to ₹3 crore (w.e.f. 1 April 2024), ≤ 5% cash receipts | Not required |
| Profit < prescribed % and income > exemption | Audit Required |
📌 Example 4: ₹1.8 crore turnover, 4% profit, ₹12 lakh income. ➡ Audit Required
👨⚖️ Professionals (Section 44ADA)
| Criteria | Audit Requirement |
|---|---|
| Gross receipts ≤ ₹50 lakh, profit ≥ 50% | Not required |
| Up to ₹75 lakh, ≤ 5% cash receipts | Not required |
| Profit < 50% and income > exemption | Audit Required |
📌 Example 6: Consultant with ₹52 lakh revenue, 40% profit. ➡ Audit Required
🔄 Opting Out of the Presumptive Scheme
📌 Example 7: Mr. D opts out of presumptive in FY 2024–25. ➡ Audit required for 5 years
🚚 Transporters / Non-Residents (Section 44AE/44BB/44BBB)
Audit applies if: Profit is below the deemed % and total income exceeds the exemption limit.
📑 Already Audited under Other Laws
Audit under other laws counts as a valid Tax Audit if filed on time.
🗓️ Due Dates for Tax Audit – FY 2024–25
| Particulars | Due Date |
|---|---|
| Tax Audit Report filing (without TP) | 30th September 2025 |
| Tax Audit Report with Transfer Pricing (Form 3CEB) | 31st October 2025 |
⚠️ Penalty for Non-Compliance
If the audit is not conducted when required,
Penalty = 0.5% of turnover/gross receipts, subject to a maximum of ₹1.5 lakh.
Can be waived for reasonable causes like illness, natural calamity, etc.
🔚 Conclusion
Know your numbers. Evaluate your turnover, digital vs. cash transactions, profit declaration, and income levels. This determines your tax audit requirement. With new relaxations for digital transactions, many small businesses and professionals can now avoid an audit, but only if conditions are met.
💡 Need help determining your audit requirement or filing returns? We’re here to assist with expert evaluation and timely compliance.
❓ Frequently Asked Questions (FAQs)
Has the presumptive limit for businesses increased to ₹3 crore?
✅ Yes, from FY 2024–25 if total cash receipts are ≤ 5%
What happens if I opt out of presumptive taxation after opting in?
🔁 If you opt out of Section 44AD in any one year, you cannot opt in again for the next 5 years, and tax audit becomes mandatory during that period (if income exceeds the exemption limit).
Is tax audit applicable if I have already undergone an audit under another law (e.g., Companies Act)?
📄 Yes, but if such an audit is done and the report is submitted on time in Form 3CA & 3CD, it suffices for tax audit under Section 44AB.
Can existing statutory audit under Companies/LLP Act replace tax audit?
📘 Yes, if the audit report (Form 3CA/3CB + 3CD) is filed on time under Section 44AB.
What is the due date for filing the tax audit report for FY 2024–25?
🗓️ 30 September 2025, or 31 October 2025 if subject to transfer pricing audit.
