Indian tax forms are used to document information in compliance with the Income Tax Act of 1961 and in accordance with the Income Tax Rules (codified in 1962), which govern the process of filing income tax returns in India. Two of such forms are Form 3CA & Form 3CB.
Latest Update
- Now taxpayers can download the latest version of the offline utility for 3CA-3CD and 3CB-3CD from the official portal. Download Now
- For AY 2024-25, the Income Tax Department finds that over 34 lakh tax audit reports have been filed by 7th October 2024. Read More
- The CBDT has notified vide Notification No. 27/2024 /F. No. 370142/3/2024-TPL The changes have been made to the following Clauses of Form 3CD: clause no 8a,12,18,19,21(a),21(b),26,32. These changes shall apply to all tax audit reports signed on or after 05-03-2024. Read Notification
- The deadline for submitting I-T audit reports has been extended from September 30th, 2024 to October 7th, 2024 by the CBDT for the financial year 2023-24. Read Circular
Filing 3CA and 3CB Form Via Software
What is Form 3CA and Its Applicability?
The audit of the accounts under section 44AB, in case of a person who carries on business or profession and who is required under any other law to get his accounts the audited shall file such audit report in Form 3CA.
Major Components of Form 3CA
Some of the prominent components of 3CA are mentioned below-
- Details of the Assessee i.e. Name, Address and Permanent Account Number (PAN).
- Date of the audit report.
- Annexure details (Balance sheet, Profit & Loss A/c, other documents and Form 3CD).
- A declaration by the auditor that all the filled details and the Annexure are true and correct subject to qualifications/observations if any.
- Auditor’s name, address, membership number, FRN no. and signature with stamp/seal.
What is Form 3CB and Its Applicability?
The audit of the accounts under section 44AB, in case of a person who carries on business or profession and who is not required under any other law to get his accounts the audited shall file such audit report in Form 3CB.
Major Components of Form 3CB
Here are the major components of Form 3CB:
- Details of the Assessee i.e. Name, Address and Permanent Account Number (PAN).
- Date of the audit report.
- Annexure details (Balance sheet, Profit & Loss A/c, other documents and Form 3CD).
- A declaration by the auditor that they have obtained all information and explanations which were necessary for the purpose of the audit.
- Reporting of the detailed observations, comments, discrepancies, and inconsistencies (if any).
- The Form includes the declaration made by the auditor that proper books of accounts are being maintained at the branch and head offices.
- A declaration by the Chartered Accountant that all the filled details and the Annexure are true and correct subject to qualifications/observations if any.
- In the end, the Form specifies the name, address, membership number, FRN no and signature of the auditor with stamp/seal.
What is Form 3CD and Its Applicability?
Form 3CD is a statement of particulars required to be furnished in accordance with Rule 6G and Section 44AB along with Form3CA/3B as applicable.
- There are total 41 clauses in Form 3CD (divided in Part A and Part B) containing disclosures related to loans, deductions, TDS paid etc.
- In the end, the Form specifies the name, address, membership number, FRN no and signature of the auditor with stamp/seal.
What is the Due Date for the Audit Report?
Taxpayers who are yet to be audited are required to obtain their audit report in Form 3CA on or before the due date of September 30 of the particular assessment year. For example, If the financial year 2023-2024 means the assessment year 2024-2025, then you have to get the audit report on or before September 30, 2024. However, If the taxpayer is obtaining Form 3CE for the audit report, the due date for the same assessment year is November 30, 2024.
Thus, if the financial year 2023-2024 means the assessment year 2024-2025 then the taxpayer must have to obtain Form 3CE till November 30, 2024. When an auditor presents these audit reports to the taxpayer through digital/ electronic mode, taxpayers must have to check and approve them before they are filed by the tax authorities.
Differences Between Form 3CA/3CB/3CD
The major difference between Form 3CA and 3CB is the clause requiring an audit. Whereas it is a mandatory requirement in Form 3CA, no such requirement exists in Form 3CB. The key difference between Form 3CA and Form 3CD is related to the fact that Form 3CD is a very detailed statement of the accounts used as supporting documents for Form 3CA. Following are the major differences between these three forms by Section 44AB:
| Form 3CA | Form 3CB | Form 3CD |
|---|---|---|
| For professionals/businesses who require mandatory audit under law other than income tax law | For those who don’t require mandatory audit under any law other than income tax law | Well-detailed Form having fields highlighting various audit information |
| Single page form with audit details derived from many documents like balance sheet, Form 3CD, P&L statement, etc | Single Page Form having income details of documents tetched from multiple documents like Balance Sheet, P&L Statement, etc | Detailed audit reports Form to characterize several areas that should be filled in with specific details such as revenue, profit, turnover, expenditure, asset-liability statement, and more |
| any applicable tax assessee irrespective of income or turnover can submit | Only assessees having income over Rs. 1 crore and not opted for presumptive tax system can furnish this form | Applicable to all business audits and is a detailed description of all transactions being carried out by the business / professional |
FAQs Income Tax Audit Under Section 44AB
Q.1 – What is tax audit?
The dictionary meaning of the word “audit” is to examine, review, check, inspect and so on. The word Audit has been mentioned in various laws as it is a prerequisite for many compliances. Consequently
- The Company law requires a company audit
- The Cost accounting law requires a cost audit and so on.
- The Income-tax Law makes it mandatory for the taxpayer in certain cases to get the audit of the accounts of their business/profession
Section 44AB makes it mandatory for a specific class of taxpayers to get their books of accounts audited from a chartered accountant.
The audit under section 44AB
- Seeks to ascertain the compliance of various provisions of the Income-tax Law.
- And The audit that is undertaken by the chartered accountant of the books of accounts of the taxpayer in pursuing of the requirement of section 44AB is called tax audit.
The chartered accountant who conducts the tax audit is needed to give his findings, observation and so on in the form of the audit report. The report of the tax audit has to be provided by the chartered accountant in Form Nos. 3CA/3CB and 3CD.
Q.2 – What is the objective of a tax audit?
One of the primary objectives of a tax audit is to
- Ascertain
- Derive
- Report
The requirements of Forms bearing number numbers 3 CA/3CB and 3 CD Moreover, an apt audit for the tax purposes shall ensure that the
- Books of Account
- Other records
Have been properly maintained and that they truly reflect the income of the taxpayer and that the claims for deductions have been correctly made. Moreover, the audit also helps in checking fraudulent practices. It also provides for administration of tax laws by properly presenting accounts before the tax officials and consequently save the time of Assessing officers in doing routine verifications like checking correctness of totals and verification of whether purchases and sales have been properly vouched for or not. And so the precious time of the Assessing officers could be utilised in attending more important investigational aspects of a case.
Q.3 – As per section 44AB who is compulsorily required to get his accounts audited ?
As per section 44AB, following persons are as per law required to get their accounts audited:
Following people are legally required to have their accounts audited
- A person who is carrying on business, if his total sales, turnover or gross receipts in business for the year are more than Rs. 1 crore. However, the exception is a person who has opted for presumptive taxation scheme as per section 44AD and his total sales or turnover is not more than Rs 2 crores. It is important to mention here that the threshold limit is increased from Rs 1 crore to Rs 10 crore when more than 95% of the business transactions have been done through banking channel.
- A person involved in a profession, if his gross receipts in a profession are more than Rs 50 lakhs annually.
- An assessee who has declared profit for any previous year in accordance with section 44 AD and he decreases profit for any of one 5 assessment years relevant to the previous year succeeding such previous year which is lower than the profit computed as per section 44AD and his income is more than the amount that is not subject to tax.
- If an assessee who is eligible opts for the presumptive taxation scheme within the aforesaid period, he cannot opt to revert back to the presumptive taxation scheme for a tenure of 5 assessment years thereafter.
- A person who has been eligible to opt for the presumptive taxation scheme of section 44ADA but he claims that the profits or gains for the aforesaid profession to be less than the profit and gains computed as per the presumptive taxation scheme and his income is more than the amount that is not chargeable to tax.
- The aforesaid provision shall not apply to the person who has opted for the presumptive taxation scheme as per section 44AD and his total sales or turnover is not more than Rs 2 crores.
- A person who is eligible to choose the presumptive taxation scheme of section 44AE but he claims the profits or gains for the aforesaid business to be less than the profits and gains that are computed as per the presumptive taxation scheme of section 44AE.
- A person who is eligible to choose for the taxation scheme as mentioned under section 44BB or section 44BBB;however, he claims the profit or gains for the aforesaid business to be less than the profit and gains calculated as per the taxation scheme of these sections.
Q.4 – If an individual is required by any other law to get its accounts audited, then is it compulsory by law for him to once again get his accounts audited so that it can comply with the requirement of section 44AB?
Persons like the company or the co-operative society are necessarily required to get their accounts audited as per their respective law. However, Section 44AB provides that if a person is required by any other law to get his accounts audited, then he is not required again to get his accounts audited to follow with the necessary requirement of section 44AB. In such a case, it shall be enough if the aforesaid person gets the accounts of such business or profession audited under such law and gets the report of the audit as required as per other law and in addition also a report by the chartered accountant in the form prescribed under section 44AB that is Form No. 3CA and Form 3CD.
Q.5 – What are Form Nos. 3CA/3CB and 3CD?
The report obtained from the tax audit that has been undertaken by the chartered accountant has to be furnished in the prescribed form. The form that is prescribed for audit report with respect to an audit conducted under section 44AB is Form No. 3CB and so the prescribed particulars have to be reported in Form No. 3CD. In the case of those persons who are covered under the previous FAQ that is who are necessarily required to get their accounts audited by or under any other law, the form that is prescribed for audit report is Form No. 3CA and the aforesaid particulars are to be reported in Form No. 3CD.
Q.6 – What is the concerned due date by which a taxpayer ought to get his accounts audited?
A person who is covered by section 44AB ought to get his accounts audited and ought to obtain the audit report on or before 30th September of the relevant assessment year. For instance, the Tax audit report for the financial year 2021-22 corresponding to the assessment year 2022-23 ought to be obtained on or before 30th September 2022
The tax audit report ought to be filed electronically by the chartered accountant to the Income-tax Department. And After the filing of the report by the chartered accountant, the concerned taxpayer has to get approved his report from his e-fling account with Income-tax Department (i.e., at www.incometaxindiaefiling.gov.in ).
Q.7 – What is the penalty for not getting the accounts audited as required by section 44AB?
According to section 271B, if it is necessary for any person to follow section 44AB fails to get his accounts audited in respect of any year or years as required under section 44AB or furnish such report as required under section 44AB, the Assessing Officer might impose a penalty. The penalty will be lower of the following amounts:
- 0.5% of the total sales, gross receipts, or the turnover as the case may be, in business, or otherwise of the gross receipts in the profession, in such year or years.
- Rs. 1,50,000.However, as per section 271B, no penalty shall be levied if reasonable cause for such failure has been proved.
