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.
Who is Required to Get a Compulsory Tax Audit?
| 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 -
Audit Report
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.
Statement of Particulars
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.
Point 1
- Address and name of the person paying the tax, along with their PAN number.
- Name of the Auditor
- Act under which the accounts were audited
- Date of Audit Report
- P&L account period/ income and expenditure account.
- Balance sheet date
Point 2
- Declaration of the attachment of the 3CD report along with the tax audit report.
Point 3
- Audit findings and observations are listed in the information presented in Form 3CD.
Point 4
- Date and place of signing the audit report
- Name, address, and membership number of the auditor
- Seal or stamp of the auditor.
What is the Due Date of Obtaining an Audit Report?
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.
What is the Penalty for Not Filing the Audit Report?
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 -
- 0.5% of gross receipts, turnover, or sales.
- INR 1,50,000
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!
Trusted by 1 Million+ Users
4.9 Star User Rating
2500 Cr. Taxes Saved Already
