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The period of June to September every year signifies the time for ITR filing in India. However, the last date to file ITR for every individual depends on the nature and size of business they are running. For example, larger companies that are mandatorily required to get a tax audit done can do so by 30th September. Similarly, individual taxpayers, and HUFs are required to file their ITR by July 31st every year.
This article focuses on Form 3CD, which is a tax audit form that must be filed by companies that are required to submit a tax audit report. It helps you understand what is form 3CD, the applicability of Form 3CD, tax audit eligibility criteria, and tax audit forms.
Form 3CD is a tax audit form that is a comprehensive statement that covers 41 clauses. These terms are based on the business transactions such as revenue, turnover, profits, expenses, details of assets and liabilities.
Form 3CD is used to ensure the proper maintenance and accuracy of the books of accounts. It is also used to report discrepancies or observations noted by the CA during the audit.
Form 3CD is applicable if the assessee or taxpayer is required to get a tax audit done under any law. The auditor needs to submit the audit findings in the audit report through audit form 3CD. The statement of particulars is made as per Form 3CD. This form consists of 44 clauses in which the auditor has to comment on various matters.
These 44 clauses are divided into 2 parts. While Part A covers the basic details about the assessee, Part B consists of the particulars of compliances under the Income Tax Act that need to be furnished.
| Assessee Engaged in Business | Eligibility |
|---|---|
| Carrying on business (not opted for presumptive scheme) | Total sales, turnover, or gross receipts in business exceed Rs. 1 crore. (Rs. 10 crores if cash receipts are not more than 5% of turnover and cash payments are not more than 5% of aggregate payments in the PY). |
| Carrying on business (opted for presumptive scheme u/s 44AD) | If the assessee does not declare profits under the presumptive basis for 5 successive A.Y. after declaring profit on a presumptive basis, then they must maintain accounting records for the year of default and the 5 years and get them audited under section 44AB (if their income exceeds the basic exemption limit). |
| Carrying on business (eligible for presumptive taxation under section 44AE, 44BB, or 44BBB) | Claims that the profits or gains for such business are lower than those computed under the presumptive taxation scheme of sections 44AE, 44BB, or 44BBB. |
| Assessee Engaged in Profession | Eligibility |
|---|---|
| Assessee carrying on profession | Gross receipts in profession exceed Rs. 50 lakhs. |
| Assessee carrying on notified profession under section 44AA and gross receipts do not exceed Rs.50 lakhs. | If they claim that profits from such profession are lower than the profits under section 44ADA and their income exceeds the basic exemption limit. |
The various forms required for audit purposes are divided into 2 parts -
Form 3CA - A taxpayer who runs a business or profession who is mandatorily required to get his accounts audited under any law (other than the Income Tax Act) has to furnish an audit report under Form 3CA. For example, a company that is required to get its accounts audited under the Companies Act can furnish an audit report in Form 3CA.
Form 3CB - A taxpayer who runs a business or profession but is not required to get its books audited under any other law can furnish the audit report in Form 3CB. For example, a company having a turnover of more than 1 Cr. and not opting for a presumptive taxation scheme is not required to get a tax audit done under any law except the Income Tax Law. Such taxpayers can furnish their audit report in Form 3CB.
Form 3 CD - Form 3 CD presents a detailed statement of particulars. This form consists of all the details related to the different aspects of transactions and business that have to be filled in at the right places.
Form 3CE - Foreign companies or non-residents receiving technical services or royalty fees from the Indian government or an Indian company are required to get their accounts audited. Such companies have to furnish their audit report in Form 3CE.
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For companies that are required to get their accounts tax audited, the deadline is September 30 every year. For FY 2023-24, the last date for tax audit will be September 30, 2024.
The last day for filing ITR for companies that are required to get a tax audit done is 31 October every year (31 October 2024 for FY-23-24). If you miss the deadline, you can still file the ITR after paying a penalty.
Any delay in filing ITR or non-filing of ITR can lead to a penalty being charged. If a taxpayer is required to get a tax audit done but fails to do so within the prescribed time, the least of the following can be charged as a penalty -
If you are someone who is required to get a tax audit, it is important for you to know about Form 3CD, which is crucial to the tax audit.
If you have any tax-related queries or are still not sure if you are eligible for a tax audit, contact our tax experts. Get Tax Advisory Services Now!
Form 3CA-3CD applies to individuals or entities mandated by law to undergo an audit of their accounts. Form 3CB-3CD is for those individuals or entities not falling under the aforementioned category, meaning their accounts are not compelled to undergo audit under any other legal provision.
The threshold for undergoing a tax audit under Section 44AB is Rs 5 crore. However, if at least 95% of the business transactions are conducted digitally, the threshold limit increases to Rs 10 crore.
If the books of accounts of the assessee are mandated to be audited under any other law, such as the Companies Act, 2013, including tax audit under the Income Tax Act, 1961, then Form 3CA (Audit Annexure Form) must be enclosed with Form 3CD.
A Chartered Accountant (CA) certifies the accuracy of the taxpayer's books of accounts, notes any observations or discrepancies, and reports the required information in accordance with the provisions of the Income Tax Act, as specified in Form 3CD.
While Form 3CA is mandatory for audit requirements, Form 3CB does not have a compulsory submission requirement. The primary distinction between Form 3CA and Form 3CB lies in the level of detail provided: Form 3CD serves as a comprehensive statement of accounts, acting as a supporting document for Form 3CA.
Clause 44 of the Tax Audit Report forms an integral element for auditors and businesses alike. This clause pertains to the reporting requirements under GST. Under this clause, companies are required to provide a breakdown of all the expenses incurred, whether they are registered under GST or not.
