Section 63 of Income Tax Act, 2025 (formerly Section 44AB of Income Tax Act, 1961) read with Rule 6G and ICAI Guidance Note on Tax Audit

Tax Audit & Certification

Comprehensive Tax Audit under Section 63 of the Income-tax Act, 2025 (formerly Section 44AB of the Income-tax Act, 1961), covering exhaustive 44-clause Form 3CD verification, Section 55 MSME compliance (formerly Section 43B(h)), TDS/TCS reconciliations, and Form 3CA/3CB certification with UDIN authentication.

CA Due Diligence

Official Portal Filing

State Stamp Advisory

Tax Audit & Certification Statutory Advisory

Turnkey Statutory Filing

MCA & Tax Practice

Official Govt of India AuthorityCBDT & ICAI, Government of India

Income Tax e-Filing Official Portal & ICAI UDIN

The official Government of India portal for e-filing Form 3CA/3CB audit reports with 44-clause Form 3CD schedules, verifying CA digital signatures, generating mandatory UDINs, and tracking client worklist approvals.

Visit Govt Portal

STATUTORY OVERVIEW

Statutory Tax Auditing Under Section 63 of the Income-tax Act, 2025 (formerly Section 44AB) & Tax Certifications

A Tax Audit is an independent statutory examination mandated by the Income Tax Department under Section 63 of the Income-tax Act, 2025 (formerly Section 44AB of the Income-tax Act, 1961). The audit ensures that commercial entities maintain accurate books of accounts, claim permissible business deductions, comply with statutory withholding obligations, and reconcile commercial financial statements with fiscal tax computation rules. Our practicing Chartered Accountants conduct exhaustive field examinations, reconcile cross-statute data with GST and AIS/TIS portals, and electronically upload authenticated audit reports with system-generated UDIN verification.

Statutory & Practice Summary • At-A-Glance

ICAI UDIN Authentication Mandate

Governing Framework

Section 63 of Income Tax Act, 2025 (formerly Section 44AB of Income Tax Act, 1961) read with Rule 6G and ICAI Guidance Note on Tax Audit

Regulatory Authority

Central Board of Direct Taxes (CBDT), Ministry of Finance, Govt of India & The Institute of Chartered Accountants of India (ICAI)

Professional Assurance

Chartered Accountants Attestation under ICAI Standards & Code of Ethics

DOCUMENTATION MATRIX

Mandatory Documents Checklist

Self-attested scanned copies required

1. Promoters / Partners / Directors KYC

✓PAN Card, Aadhaar Card, and Class 3 Digital Signature Certificate (DSC) of the Authorized Signatory
✓CA appointment on the Income Tax e-Filing Portal under 'My CA' worklist
✓Written Management Representation Letter under ICAI SA 580 on company letterhead

2. Registered Office & Premises Proof

✓Registered Business Address utility bills and bank statements of all active current accounts
✓Multi-locational branch and factory addresses operating under the unified PAN

3. Specific Statutory Declarations & Enclosures

•Trial Balance, Balance Sheet, Profit & Loss Account, and General Ledgers
•Fixed Assets Register with depreciation calculations under both IT Act and Companies Act
•Reconciliation of turnover with Form GSTR-1, GSTR-3B, and GSTR-9C annual returns
•Quarterly TDS Returns (Forms 24Q, 26Q), TRACES 26AS/AIS, and challan payment receipts
•Year-end Trade Payables aging schedule specifically identifying MSME vendor balances [formerly Section 43B(h)]
•Quantitative stock registers and physical stock inventory valuation certificates

PROCEDURAL ROADMAP

Step-by-Step Filing & Approval Process

Structured execution roadmap managed by our Chartered Accountants from pre-filing due diligence to certificate allotment.

01Week 1

Threshold Evaluation & Engagement

Evaluating gross business turnover, 95% banking transaction ratio for ₹10 Cr limit, presumptive opt-out status, and issuing ICAI engagement letters.

02Weeks 2 - 3

Substantive 44-Clause 3CD Vouching

Testing ledger transactions across all 44 clauses of Form 3CD: depreciation, Section 40A(3) cash limits, MSME 43B(h) compliance, and statutory dues.

03Week 4

Draft Audit Report & UDIN Issuance

Compiling Form 3CA (corporate entities) or Form 3CB (non-corporate entities) with Form 3CD annexures and generating mandatory 18-digit ICAI UDIN.

04Before Sep 30th

CBDT Portal Upload & Client Approval

Uploading JSON schema on the income tax portal under the CA login, followed by client electronic acceptance prior to the statutory cutoff date.

Exhaustive 44-Clause Form 3CD Examination & Section 55 MSME Reporting

Practice Scope & Statutory Guidance

We verify all 44 reporting clauses of Form 3CD, examining accounting policies, inventory valuation methods under Section 58 of the Income-tax Act, 2025 (formerly Section 145A of the Income-tax Act, 1961), tax depreciation calculations under Section 46 of the Income-tax Act, 2025 (formerly Section 32 of the Income-tax Act, 1961), payments to related parties under Section 54 of the Income-tax Act, 2025 (formerly Section 40A(2)(b) of the Income-tax Act, 1961), and cash transactions exceeding statutory thresholds under Section 54 and Section 355 of the Income-tax Act, 2025 (formerly Section 40A(3), Section 269SS, Section 269ST, and Section 269T of the Income-tax Act, 1961). Crucially, our audit provides thorough verification under Clause 22 for compliance with statutory deduction rules under Section 55 of the Income-tax Act, 2025 (formerly Section 43B(h) of the Income-tax Act, 1961 read with Section 15 of the MSMED Act, 2006), identifying delayed vendor payments to registered Micro and Small Enterprises beyond the 15-day or 45-day statutory window to quantify mandatory tax disallowances.

Cross-Statute Reconciliations: TDS/TCS, GST & Annual Information Statement

Practice Scope & Statutory Guidance

Tax disallowances arise from non-deduction or non-deposit of TDS under Section 53 of the Income-tax Act, 2025 (formerly Section 40(a)(ia) for resident payments and Section 40(a)(i) for non-resident payments under the Income-tax Act, 1961). We perform three-way reconciliations between commercial trial balances, electronic TDS returns (Forms 24Q, 26Q, 27Q), and TRACES Form 26AS/AIS/TIS. In parallel, our audit cross-verifies reported turnover and input tax credit (ITC) with GSTR-1, GSTR-3B, and annual GSTR-9/9C returns, eliminating discrepancies that could trigger automated income tax scrutiny notices.

Form 3CA / 3CB Reporting & Specialized Tax Certifications

Practice Scope & Statutory Guidance

We issue Form 3CA for corporate entities and LLPs whose accounts are audited under the Companies Act, 2013 or LLP Act, 2008, and Form 3CB for sole proprietorships, partnership firms, and non-corporate entities. In addition to Section 63 audits, our practice issues specialized statutory tax certificates, including international and domestic transfer pricing certifications under Section 128 of the Income-tax Act, 2025 (formerly Section 92E / Form 3CEB of the Income-tax Act, 1961), foreign outward remittance withholding certificates under Section 395 of the Income-tax Act, 2025 (formerly Section 195 / Form 15CB of the Income-tax Act, 1961), inter-corporate dividend deduction certificates, and net-worth attestations for bank tenders.

STATUTORY MATRIX

Statutory Provisions & Regulatory Comparative Matrix

Comparative analysis of governing sections under the new framework alongside legacy statutory references.

Taxpayer Category / Business Threshold	Governing Section: New Act 2025 (Old Act 1961)	Mandatory Audit Threshold & Audit Report Form
Business with > 5% Cash Transactions	Section 63 of Income Tax Act, 2025 (formerly Section 44AB(a) of 1961 Act)	Turnover exceeding ₹1 Crore. Form 3CA/3CD (Companies) or Form 3CB/3CD (Firms/Proprietors).
Business with ≥ 95% Banking / Digital Transactions	Section 63 of Income Tax Act, 2025 (formerly Section 44AB(a) Proviso of 1961 Act)	Enhanced turnover limit of ₹10 Crores. Cash receipts & payments must both remain below 5%.
Professionals (CAs, Doctors, Engineers, Lawyers)	Section 63 of Income Tax Act, 2025 (formerly Section 44AB(b) of 1961 Act)	Gross receipts exceeding ₹50 Lakhs (or ₹75 Lakhs where cash receipts do not exceed 5%).
Presumptive Business Declaring Lower Profit	Section 59 & 63 of 2025 Act (formerly Section 44AD & 44AB(e) of 1961 Act)	Declaring profit below 8% / 6% after having opted into presumptive scheme, with income above basic threshold.
Delayed Payments to MSME Suppliers	Section 55 of Income Tax Act, 2025 (formerly Section 43B(h) of 1961 Act)	Mandatory disclosure in Clause 22 of Form 3CD for payments delayed beyond 15/45 days to MSEs.

ONGOING GOVERNANCE

Mandatory Post-Registration Compliances

Failing to complete statutory post-incorporation actions carries steep daily penalties. Our CA firm manages continuous compliance:

Form 3CA/3CB with Form 3CD30th September of the Assessment Year

Statutory Tax Audit Due Date

Mandatory filing deadline. Delay attracts penalty under Section 422 of 2025 Act (formerly Section 271B of 1961 Act) of 0.5% of turnover up to ₹1,50,000.

Portal Worklist DashboardImmediately upon CA upload

Client Electronic Acceptance

The taxpayer must log in to the e-filing portal and digitally accept the audit report using DSC or Aadhaar OTP.

Form ITR-3, ITR-5, or ITR-631st October of the Assessment Year

ITR Filing for Audited Entities

Submission of the comprehensive income tax return with audited schedule disclosures and UDIN cross-referencing.

ICAI SQC-1 ComplianceMinimum 8 Years

Audit Working Paper Retention

Preserving audit files, sampling documentation, and third-party confirmations.

FREQUENTLY ASKED QUESTIONS

Statutory FAQs & Practical Guidance

Frequently asked questions and procedural guidance regarding Tax Audit & Certification.

What constitutes a digital transaction for claiming the enhanced ₹10 Crore tax audit limit?

To qualify for the ₹10 Crore threshold under Section 63 (formerly Section 44AB), both aggregate business receipts (including turnover and capital introduction) and aggregate business payments (including expenses and asset purchases) made in cash must not exceed 5% of their respective totals. Transactions via cheques, RTGS, NEFT, IMPS, and UPI qualify as non-cash banking transactions.

How is Section 43B(h) / Section 55 MSME non-compliance verified in Form 3CD?

Under Clause 22 of Form 3CD, the tax auditor examines the aging of all trade payables outstanding to Micro and Small Enterprises registered under the MSMED Act, 2006. Any amount unpaid beyond 15 days (without written agreement) or beyond 45 days (with written agreement) as of the financial year-end is disallowed and added back to taxable profits.

What is the penalty for failing to file the Tax Audit Report before the statutory cutoff date?

Under Section 422 of the Income-tax Act, 2025 (formerly Section 271B of the Income-tax Act, 1961), failure to complete the tax audit or upload Form 3CA/3CB and Form 3CD by September 30th attracts an automatic financial penalty equal to 0.5% of total turnover, sales, or gross receipts, subject to a statutory cap of ₹1,50,000.

Why is UDIN generation mandatory for Form 3CD tax audit reports?

Under mandatory ICAI regulations, an 18-digit Unique Document Identification Number (UDIN) must be generated by the certifying Chartered Accountant within 60 days of signing Form 3CA/3CB and uploaded onto the CBDT e-filing portal. Returns submitted without valid UDINs are treated as defective or non-compliant by the Income Tax Department.

STATUTORY ADVISORY DESK • PRACTICE INQUIRIES

Statutory Inquiries & Practice Advisory

In strict conformity with ICAI Council Guidelines No. 1-CA(7)/06/2004, professional engagements for Tax Audit & Certification are accepted following formal conflict verification and statutory documentation. Contact our registered practice offices for procedural guidance.

Contact Practice Office +91 99140-14949