Introduction

If you are a business owner or professional in Mumbai with income exceeding the prescribed limits, a tax audit under Section 44AB of the Income Tax Act, 1961 becomes mandatory. This audit ensures that your accounts are properly maintained and comply with income tax laws.

Whether you run a small business in Dadar, a corporate office in Bandra, or a consultancy in Andheri, the tax audit process can be complex without a proper checklist. This article provides a step-by-step Tax Audit checklist for Section 44AB in Mumbai, ensuring you meet all compliance requirements on time.

1. Understanding Section 44AB – Applicability

Before going into the checklist, it’s important to know who needs a tax audit:

• Businesses: If total sales, turnover, or gross receipts exceed ₹1 crore (₹10 crore if cash receipts and payments are limited to 5% each).

• Professionals: If gross receipts exceed ₹50 lakh in a financial year.

• Presumptive Taxation Cases: If declaring income lower than prescribed rates under sections 44AD, 44ADA, or 44AE, and income exceeds the basic exemption limit.

2. Tax Audit Checklist for Section 44AB in Mumbai

Here’s a comprehensive checklist to prepare for a tax audit in Mumbai:

A. Financial Records

• Audited Balance Sheet and Profit & Loss Account

• Trial Balance for the financial year

• Bank statements for all accounts (with reconciliation)

• Ledger accounts for major transactions

• Fixed asset register with depreciation details

B. Tax & Compliance Records

• GST returns and reconciliation statements

• TDS returns and payment challans

• Previous year’s tax audit report (Form 3CA/3CB & 3CD)

• PAN, TAN, and GST registration details

C. Supporting Documents

• Sales and purchase invoices

• Expense vouchers and payment proofs

• Loan agreements and interest payment records

• Stock registers (opening, purchase, sales, closing)

D. Other Required Information

• Details of related party transactions

• Information on any new business activity started

• Foreign transactions or overseas investments, if any

• Details of cash transactions exceeding prescribed limits

3. Filing Procedure in Mumbai

• Appoint a Chartered Accountant (CA): Only a qualified CA in practice can conduct the audit.

• Preparation & Verification: Gather all records, ensure accuracy, and reconcile mismatches.

• Filing Forms: Auditor uploads the Tax Audit Report (Form 3CA/3CB & Form 3CD) on the Income Tax e-filing portal.

• Taxpayer Approval: You must accept the report online before it is considered filed.

4. Due Date for Tax Audit Under Section 44AB

For most taxpayers, the due date is 30th September of the assessment year. However, it may change based on government notifications—especially relevant for businesses in Mumbai during special extensions.

5. Tips for a Smooth Tax Audit in Mumbai

• Maintain digital records to avoid last-minute hassles.

• Reconcile GST and income tax records regularly.

• Avoid cash transactions beyond prescribed limits

• Keep a year-round compliance calendar to track deadlines.