Tax Audit Firm for Section 44AB Audits
Form 3CD prepared with care, disallowances identified before the department does, and the report filed within time.
An Audit Firm That Treats Form 3CD as More Than a Formality
A tax audit under Section 44AB of the Income Tax Act, 1961 is not an opinion on your financial statements. It is a report by a Chartered Accountant on a prescribed list of particulars – the contents of Form 3CD – that the Income Tax Department uses to assess whether your taxable income has been computed correctly.
That distinction matters. Form 3CD requires disclosure of specific items – payments disallowed for late deposit of statutory dues, cash transactions above prescribed limits, TDS defaults, related-party payments, and more. Each disclosure is a pointer the department can follow. An audit firm that fills the form mechanically leaves those pointers unexamined.
MPVD & Associates approaches the tax audit as a chance to find and address problems while they can still be corrected, rather than merely to record them.
What a Section 44AB Tax Audit Involves
A tax audit applies where business turnover or professional receipts exceed the limits prescribed under Section 44AB for the relevant year, and in certain other situations – notably where a taxpayer who was eligible for presumptive taxation declares income below the presumptive rate and their total income exceeds the basic exemption limit. The applicable thresholds have been amended several times and can differ depending on the proportion of cash receipts and payments, so the correct starting point is to test your specific figures against the provisions in force for the year concerned.
- Form 3CA – the audit report used where the accounts are already required to be audited under another law, such as the Companies Act.
- Form 3CB – the report used where no other statutory audit applies, with the auditor also reporting on the accounts themselves.
- Form 3CD – the statement of particulars accompanying either report, covering the prescribed disclosures.
The report is filed electronically by the auditor and accepted by the taxpayer on the income tax portal. Failure to get accounts audited where required attracts a penalty under Section 271B, subject to reasonable cause.
Our Tax Audit Services
Applicability Assessment
A clear determination of whether a tax audit applies to you for the year in question, tested against the provisions in force rather than a remembered threshold.
Books & Records Review
Examination of ledgers, vouchers, bank records and statutory registers to establish whether the accounts support the return being filed.
Disallowance Identification
Statutory dues deposited late, cash transactions above prescribed limits and TDS defaults identified early, when there is often still time to act.
Form 3CD Preparation
Each clause completed on the basis of verified records, with the reasoning documented so disclosures can be explained if the return is picked up.
Filing & Acceptance
The report uploaded within the applicable due date and the acceptance process on the income tax portal walked through with you.
Post-Audit Advice
A note on what caused disallowances this year and what to change so the same items do not recur in the next audit.
How Our Tax Audit Process Works
Step 1 – Confirming Applicability and Scope
We test your turnover or receipts against the provisions applicable for the year, confirm whether Form 3CA or 3CB applies, and agree the engagement and timetable in writing.
Step 2 – Records and Reconciliation
Books are reconciled to bank statements, GST returns and TDS filings. Mismatches between the books and what has already been reported to the departments are among the most common findings.
Step 3 – Verification and Testing
Vouching, ledger scrutiny and sample testing across the areas Form 3CD covers – statutory dues, cash dealings, loans and deposits, related-party transactions and TDS compliance.
Step 4 – Clause-by-Clause Reporting
Form 3CD is completed against verified evidence. Where a disclosure is required we tell you what it says and why before the report is finalised, so nothing is a surprise.
Step 5 – Filing and Follow-Up
The report is uploaded within the due date, you accept it on the portal, and we set out the corrective steps worth taking before the next year end.
Issues a Tax Audit Commonly Uncovers
These recur across engagements and each has a reporting consequence in Form 3CD:
- Statutory dues paid after the due date – provident fund, ESI and similar dues deposited late can lead to disallowance of the deduction.
- TDS not deducted or not deposited – resulting in disallowance of part or all of the related expenditure, in addition to interest and fees.
- Cash payments above prescribed limits – disallowed and reportable.
- Loans or deposits accepted or repaid in cash – reportable, with separate penal provisions applying.
- Books not reconciling to GST returns – a mismatch between turnover in the accounts and turnover reported under GST invites questions from both departments.
- Personal expenditure routed through the business – reportable and commonly challenged in assessment.
Where these are identified early enough in the year, several can still be corrected. That is a strong argument for not leaving the audit to the last few weeks.
Why Choose MPVD & Associates as Your Audit Firm
MPVD & Associates is a practising Chartered Accountancy firm carrying out tax audits alongside statutory audits, accounting and tax advisory work for clients across India.
- Audits started early. Beginning well before the due date leaves room to fix what can still be fixed.
- Disclosures explained. You know what each reportable item says and what it may attract before the report is filed.
- Joined-up with your other filings. We reconcile against GST and TDS positions as a matter of course, since inconsistency between them is a common trigger for scrutiny.
- Practical follow-up. A short list of what to change so the same disallowances do not appear next year.
- Fixed fees. Quoted after a scoping discussion, not billed open-endedly.
Where a statutory audit under the Companies Act is also required, see our company audit services. The two are frequently conducted together.
Frequently Asked Questions
Our experienced company audit and taxation professionals help you navigate complex tax laws and regulatory requirements. Contact us today to schedule a consultation.
Appoint an Audit Firm for Your Tax Audit
Tell us your turnover, your entity type and the year concerned. We will confirm whether a tax audit applies, what form is required and give you a fixed fee before starting.