Tax audit
Tax year 2026-27Is an audit required, and what does it cost if it is late
Whether the section requires an audit, by when the report is due, on which form, and what a late report costs: a flat late fee under s.428(c) for tax year 2026-27, a penalty for FY 2025-26.
Your figures
About this
The Income-tax Act, 2025 is in force from 1 April 2026, so it governs tax year 2026-27. The audit is s.63, the due date table is the one the Finance Act, 2026 substituted into s.263(1)(c), and the default is a fee under s.428(c).
About this
s.63(1), Sl. No. 1 reaches every person and no class has a threshold of its own. What the class changes is whether another law already audits them, whether the scheme table is open to them at all, and therefore which part of Form No. 26 they file.
About this
s.58(11) defines both assessee terms as a person "who is resident in India", so residence gates the business row and the profession row of the scheme table and the s.63(2) switch off that runs through them. The goods carriage row carries no residence condition. Leave this unanswered and the switch off is not granted, because a relief is not granted on a question nobody answered.
What the client carries on
Activity 1
An ordinary business. Total sales, turnover or gross receipts are tested against one crore, or ten crore where both cash tests are met.
The cash tests, measured on the person
About this
s.63(1), Sl. No. 1 measures the five percent tests on the aggregate of all amounts RECEIVED and all payments MADE by the person, not activity by activity, which is why these three boxes sit outside the activity list. Enter the aggregates. Turnover entered in place of total payments makes the denominator too small and this page more likely to put you on the one crore limb than the section is.
About this
The denominator of the payments test. Leave it empty and the test has no five percent of anything, so the ten crore limb is not granted. An empty box is an unanswered question here and not a client who paid nothing.
About this
s.63(5)(b) deems a cheque or bank draft that is not account payee to be a payment OR a receipt in cash. s.58(9) deems it cash for RECEIPTS only, and only for the business and profession entries of the scheme table. This is the one place the audit section is stricter than the scheme sections, and it is the payments limb that catches people.
The triggers that are not turnover
Left unanswered. Two triggers need it as a second limb, so they are reported as undetermined rather than as not met.
About this
An INPUT and not a finding. Four different figures depending on the regime and on the age band. Two triggers turn on it, s.58(3) and s.58(8), and each needs its own first limb as well. Settled by: The regime and the age band of the assessee, from the return itself.
About this
s.58(7) turns on an EARLIER year and not on this one: an eligible assessee who declared at the business row figure and then declared otherwise within the next five years is inside it, whatever stance is taken now. s.58(8) makes it a trigger in its own right and Form No. 26 gives it a box of its own, so it cannot be left out of the answer.
About this
s.59(4) is a separate books and audit obligation on a non-resident not being a company, or a foreign company, with royalty or fees for technical services attributable to an Indian permanent establishment. It carries NO threshold, so turnover does not answer it, and it goes on its own prescribed form rather than filling a box on Form No. 26.
Which row of the return due date table
About this
The transfer pricing row is the latest of the four due dates and it is also the one row where the two readings of the specified date part company. Left unanswered it widens the range upwards and never changes the conservative pick.
About this
This decides two separate things: whether s.63(4) can save the s.63 obligation, and which row of s.263(1) the return falls on. A company is audited under the Companies Act in every case. For an LLP it is a yes or no question on this page and never a computed answer, because the LLP Act, 2008 and the LLP Rules, 2009 were not read, so an LLP well under the limit can still land on the audited row.
The dates the charge runs on
not stated
About this
Computed from the s.263(1) row above. Enter a date here to override it, for instance where a notification has moved the due date for the year.
not stated
About this
s.428(c) says a delay up to one month for which such failure continues and names no starting point. The specified date is the natural anchor and is the default here, but the section does not say so. This one field moves the answer between the two steps, which is why it is a field and not a constant.
not stated
About this
Where the report has not gone in at all, give the date you want the exposure read at. Nothing is assumed about today.
About this
s.428(c) reads "fails to get his accounts audited AND furnish the report". The section it replaced read "or". On a literal conjunctive reading an assessee audited on time who files late owes nothing, and this is the fact that reading turns on.
s.63(1), Sl. No. 1, the verdict
requiredAudit required
One trigger is met on the facts stated: s.63(1), Sl. No. 1(a) and (b). Any one of them is enough.
01 / The verdict
An audit is not one test. It is seven
Business turnover over the limit
Why
2,00,00,000 against a limit of 1,00,00,000 on the one crore limb. Only one of the two cash tests is within five percent, and the substitution needs both, so the limit stays at one crore. The payments test is the one that fails.
Professional gross receipts over the limit
Why
There is no professional activity on the list.
Profits claimed lower than the deemed profits
Why
No activity claims profits lower than the deemed profits.
Lower than deemed claim, with total income over the exemption
Why
No activity claims profits lower than the deemed profits under the scheme table.
The five year bar applies, with total income over the exemption
Why
s.58(7) opens with an ELIGIBLE ASSESSEE declaring profit as per the business row of the Table, and s.58(8) bites only where s.58(7) applies. This assessee can never be an eligible assessee, so the bar cannot be in issue and the question is not asked. Both definitions in s.58(11) require the assessee to be resident in India and residence was not stated. The entry is a relief and is not granted on an unanswered question.
The s.61(2) Sl. Nos. 4 and 5 opt out, which is conditioned on an audit
Why
No activity is on the turnkey power project row or the mineral oil services row.
Non-resident royalty or fees for technical services through an Indian PE
Why
Whether s.59(4) reaches this assessee was not stated. It carries no threshold, so turnover does not answer it.
its own obligation, not part of the section above
The scheme table, and the notes on these triggers
Turnover is the trigger everyone checks and it is one of seven. A claim below the deemed figure reaches the section with no exemption limit condition on one limb and with one on another, the five year bar is a trigger in its own right, an opt out is conditioned on an audit, and a non-resident obligation sits outside s.63 altogether. Any one of the triggers that feeds the section being met is enough.
The presumptive calculator sets the scheme against normal books on the client's figures, with the five year bar that comes with it.
The scheme table, row by row, for this assessee
Sl. No. 1. Any business other than the goods carriage business
closedcolumn C uses "eligible assessee"
Both definitions in s.58(11) require the assessee to be resident in India and residence was not stated. The entry is a relief and is not granted on an unanswered question.
Sl. No. 2. Plying, hiring or leasing goods carriages
opencolumn C names no class of person
Sl. No. 3. A specified profession referred to in s.62(4)
closedcolumn C uses "specified assessee"
Both definitions in s.58(11) require the assessee to be resident in India and residence was not stated. The entry is a relief and is not granted on an unanswered question.
02 / The cash tests
A crossed cheque is not an account payee cheque
The business limb
limit exceededs.63(5)(b) decides this one: with the instruments treated as cash on both sides the limb moves from ten crore to one crore, and the limit goes from not crossed to crossed with it. s.58(9) would have reached the receipts side only, so a client who banked every rupee by ordinary cheque loses the ten crore limb on the PAYMENTS limb and not on the receipts limb.
The deeming, the five percent tests, and the notes
s.63(5)(b) deems a cheque or a bank draft that is not account payee to be a payment OR a receipt in cash. s.58(9) deems it cash for receipts only, and only for two entries of the scheme table. So the payments limb of the ten crore test carries a deeming the scheme sections do not, and a client who banks every rupee by ordinary cheque can fail it and lose the ten crore threshold on that limb alone.
The arithmetic is on the words. The limit has to be EXCEEDED, so a measured figure of exactly ₹ 1,00,00,000 is inside the section and carries no audit, and the substitution of ₹ 10,00,00,000 for ₹ 1,00,00,000 needs the receipts test AND the payments test at 5%. One of them alone lifts nothing. The profession limb is a flat ₹ 50,00,000 and the cash tests do not reach it.
Known and not fixed, so it is disclosed rather than hidden. The five percent receipts ratio above is struck on the turnover of the side it is printed under, not on all amounts received by the person. On a client with both a business and a profession that denominator is narrower than the section's, the ratio comes out higher, and this page can report an audit where the section would not. The error runs towards an audit and never away from one.
s.63(1), Sl. No. 1 is applied here exactly as s.63 words it. The limit is EXCEEDED, so turnover of exactly 1,00,00,000 does not trigger the audit, and the ten crore substitution needs the cash receipts test AND the cash payments test, not either one.
s.63(5)(b) deems a cheque or bank draft that is not account payee to be a payment OR a receipt in cash. s.58(9) deems it cash for RECEIPTS only, and only for the business and profession entries of the scheme table. So a client who banks every rupee by ordinary cheque can still fail the payments limb of the ten crore test, which is the one place the audit section is stricter than the scheme sections.
The cash tests are measured on the aggregate of all amounts received and all payments made by the PERSON, not activity by activity, which is why those three boxes sit outside the activity list.
03 / The date, and the form
The specified date is one month off a row
s.63(5)(a)
computed30 September 2027, off the earliest open row
Return due date 31 October 2027, the earliest open row.
Form No. 26, under rule 47
rule readForm No. 26 Part B
rule 47(1)(b): the person is not one who is required by or under any other law to get his accounts audited.
The due date rows (4), the other law saving and clause 9
s.63(5)(a) takes its date from the s.263(1) row, so the row has to be settled before the date is. More than one row is open more often than not, and what decides between them is whether another law already audits the accounts or whether s.172 reaches the assessee, not the turnover. Every row still open is listed below with the date it would give, and the question that would close it is named beside them.
Row 1. 30 November30 November 2027
An assessee, including a partner of a firm and the spouse of such a partner where s.10 applies to that spouse. Where the provisions of s.172 apply
Row 2. 31 October31 October 2027
A company; an assessee other than a company whose accounts are required to be audited under this Act or under any other law in force; a partner of such a firm, and the spouse of such a partner. Where the provisions of s.172 do not apply
Row 3. 31 August31 August 2027
An assessee having income from profits and gains of business or profession whose accounts are NOT required to be audited under this Act or under any other law in force; a partner of such a firm, and the spouse of such a partner. Where the provisions of s.172 do not apply
Row 4. 31 July31 July 2027
Any other assessee
A business or profession whose accounts are NOT required to be audited is on row 3, at 31 August, and every other assessee is on row 4, at 31 July. The Finance Act, 2026 s.66(a) split those two apart; a single row at 31 July for both is the superseded reading. The specified date is taken off the due date, so a stale row moves the charge with it.
More than one row is open on the facts stated. The row reported is the one with the EARLIEST due date, which is the conservative pick for a charge that runs on delay. The others are listed beside it. What decides it is whether the accounts are required to be audited under this Act or under any other law in force, which is a question about the other law and not about the turnover.
s.63(4), the other law saving
not engagedWhether any other law requires this person's accounts to be audited was not stated. It decides two separate things: whether s.63(4) can save the s.63 obligation, and which row of s.263(1) the return falls on.
For tax year 2026-27 the report is on FORM NO. 26 under rule 47 of the Income-tax Rules, 2026. Part A where the person is audited under another law, Part B where not, and the particulars in Parts C and D. Part A is the old 3CA, Part B the old 3CB, and Parts C and D the old 3CD. Any page still naming 3CA, 3CB or 3CD for this year is wrong.
rule 47(3) is a STATUTORY revision window and it is new. The report may be revised, on a revised report from an accountant, before 31 March 2028, and on one stated ground: a payment made after the report was furnished which necessitates recalculation of the disallowance under s.35 or s.37. No equivalent was read for FY 2025-26.
Form No. 26 Part D clause 9, the box to tick
The fourth box, provisions of section 58(8) are applicable, is the one a turnover-only calculator can never fill. It makes the five year bar an audit trigger in its own right.
Put forward: business-limits
04 / What the default costs
A fee in one year, a penalty in the other
s.428(c), a fee
mandatorynot settled while the due date row is open
The delay is 20 days against 30 September 2027, which is the earliest open row's date and not a settled one, and the one month runs to 30 October 2027, so the first step would apply on that row. There is no third step.
Nothing is charged here, because the s.263(1) row is not settled and the charge moves with it. Off the earliest open row, 30 September 2027, the clause gives ₹ 75,000; off the latest open row, 31 October 2027, it gives nothing. Neither is asserted. What settles the row: Whether s.172 applies to this assessee, which is the condition column C puts on row 1.
The percentage of turnover, for this year
no figure is produced
The audit default for this year is the fee beside it. The percentage penalty belonged to a section that was substituted with effect from the day this Act commences, so it never had an operative tax year under this Act, and a page that prints a percentage of turnover for this year is reading a section that was replaced before it ever applied.
The two years, aspect by aspect (10)
The two are not the same thing under a different name. A penalty is imposed by an officer who may decline to impose it, is capped by reference to turnover, and carries a reasonable cause defence. A fee is payable because the section says the person shall be liable to pay it, does not move with turnover at all, and carries no defence that was found anywhere in the Act. The change takes effect on the day the new Act commences, so the two years either side of it answer this question differently.
s.446 of the Income-tax Act, 2025 as originally enacted was the audit penalty, the lesser of 0.5 percent of turnover and Rs 1,50,000, and the Assessing Officer MAY impose it. The Finance Act, 2026 s.101 substituted a wholly new s.446, which is a crypto-asset statement penalty, and s.96 substituted new ss.427 and 428, where the audit default reappears as a fee in s.428(c). Both take effect on 1 April 2026, which is the day the Income-tax Act, 2025 itself commences. The 0.5 percent penalty therefore never had an operative tax year under that Act and no figure for it is shown here for tax year 2026-27.
The operative charge for tax year 2026-27 is s.428(c), a fee. Nothing on this page produces a 0.5 percent figure for this year.
s.428(c) is a FEE and not a penalty. It sits in Chapter XIX-F, it says the person shall be liable to pay it, and there is no discretion in it. The reasonable cause saving in s.470 opens on ss.441, 442, 446 and 448 and does not name s.428, and it never did: s.470 saves penalties. s.471's hearing and approval machinery is expressed as an order imposing a penalty under that Chapter, so it does not reach a fee either.
The fee does not move with turnover. A turnover of one crore and five lakh carries exactly what a turnover of five hundred crore carries, which inverts the position under the old penalty.
The delay is 20 days and the one month ends on 30 October 2027, so the charge is the first step.
Whether the accounts were audited by the anchor date was not stated. It matters: if they were, a literal conjunctive reading of "and" in s.428(c) would mean nothing is payable although the report is late.
The s.263(1) row is not settled, and the charge moves with it. Struck off the s.63(5)(a) date of the earliest open row, 30 September 2027, it is Rs 75,000; struck off the latest open row, 31 October 2027, it is nothing. Neither is asserted while the row is open.
Provision
FY 2025-26
s.271B
Tax year 2026-27
s.428(c)
Character
FY 2025-26
A penalty, in Chapter XXI
Tax year 2026-27
A fee, in Chapter XIX-F
Amount
FY 2025-26
The lesser of 0.5 percent of turnover and Rs 1,50,000
Tax year 2026-27
Rs 75,000 for a delay up to one month, Rs 1,50,000 thereafter. Flat, and there is no third step
Moves with turnover
FY 2025-26
Yes, so a small assessee is exposed to little
Tax year 2026-27
No. A turnover of one crore and five lakh pays what a turnover of five hundred crore pays
Discretion
FY 2025-26
The Assessing Officer MAY impose it
Tax year 2026-27
The person SHALL be liable to pay it
Reasonable cause
FY 2025-26
Yes, under s.273B, which the Finance (No. 2) Act, 2024 left intact
Tax year 2026-27
Not provided. s.470 saves penalties and does not name s.428, and it never did
Hearing before levy
FY 2025-26
Provided for a penalty order
Tax year 2026-27
Not provided. s.471 is expressed as an order imposing a penalty under Chapter XXI
Appeal
FY 2025-26
A penalty order is appealable
Tax year 2026-27
Not under s.357(n), which reaches a penalty under Chapter XXI. Whether the fee can be raised at all, and so whether there is any appeal, is not established
Form of the report
FY 2025-26
Form 3CA or 3CB with 3CD, named from practice and not read here
Tax year 2026-27
Form No. 26 Part A or Part B with Parts C and D, under rule 47
What was read
FY 2025-26
The amending Finance Acts only. The 1961 text of s.44AB, s.271B and s.273B is not on disk
Tax year 2026-27
The Finance Act, 2026 s.96, verbatim, and the consolidated section in the ICAI revised edition
05 / Open, and left open
Three things the clause does not say
Each changes the figure, and nothing has yet decided between the readings, so none is folded into a number here.
From what date is the delay under s.428(c) measured? The clause says a delay up to one month for which such failure continues and names no starting point.
The two readings, and what settles it
- From the specified date under s.63(5)(a), which is the date the section itself requires the audit and the report by. This is the natural reading and it is the default anchor here.
- From some other date the Board may prescribe, or from the date of a notice, neither of which the section provides for.
Settled by
A CBDT circular, a rule under Chapter XIX-F, or the computation the filing utility actually performs.
Does s.428(c) reach a person who WAS audited on time but filed the report late? s.446 as enacted read "fails to get his accounts audited ... OR furnish the audit report". s.428(c) reads "fails to get his accounts audited ... AND furnish the report of such audit".
The two readings, and what settles it
- Conjunctive, read literally: both failures are needed, so an assessee audited on time who files late owes nothing under this clause.
- Read as reaching either failure, which is what s.446 said in terms and what the marginal note to s.428 suggests was intended.
Settled by
A CBDT clarification, or the first case to decide it.
Can a s.428(c) fee be raised at all, and if so is it appealable? No section makes the Assessing Officer pass an order for it.
The three readings, and what settles it
- The only hook is the generic "the tax, interest and fee, if any" in the s.270 processing provision.
- The s.399 intimation equivalent is tied expressly to s.427(1) and (2) and not to s.428, so it does not carry it.
- s.357(n) gives an appeal against a penalty under Chapter XXI. s.428 is a fee in Chapter XIX-F and is not within it.
Settled by
The processing provision read in full, a rule under Chapter XIX-F, or assessment practice once the year is filed.
Whether the accounts were audited by the anchor date was not stated, and it is the fact the literal reading turns on. Answer it and the two readings either part company or do not, but the figure under the literal reading cannot be given until it is answered.
06 / What is asked for, and why
Every figure here is either traced or asked for
There is no third category and no silent default.
Asked for (2) and traced (11), figure by figure
A figure that could be traced to the text is printed with its provision beside it. A figure that could not is disclosed below with the gap stated and the source that would settle it named, and most of those are a box on the left of this page. Not every one of them is: a figure this page carries across from another Act, and a question this page will not answer, are disclosed without a box, because there is nothing there to override. Each row below says which of the two it is.
Asked for, because it could not be traced
Maximum amount not chargeable to income-tax
Four different figures depending on the regime and on age: Rs 4,00,000 under the default regime, and Rs 2,50,000, Rs 3,00,000 or Rs 5,00,000 under the old regime by age band. It is an INPUT here and not a finding. Two triggers turn on it, s.58(3) and s.58(8), and each needs its own first limb as well.
Settled by: The regime and the age band of the assessee, taken from the return itself.
The date the s.428(c) delay runs from
s.428(c) says a delay up to one month for which such failure continues and names no starting point. The specified date under s.63(5)(a) is the natural anchor and is the default here, but the section does not say so. This field moves the answer between Rs 75,000 and Rs 1,50,000.
Settled by: A CBDT circular, a rule under Chapter XIX-F, or the filing utility's own computation.
Traced, with the provision it came from
| Figure | Provision |
|---|---|
| Business turnover limit₹ 1,00,00,000 | s.63(1), Sl. No. 1(a) |
| Business turnover limit where both cash tests are met₹ 10,00,00,000 | s.63(1), Sl. No. 1(b) |
| Professional gross receipts limit₹ 50,00,000 | s.63(1), Sl. No. 1(c) |
| The cash test percentage, on both limbs5% | s.63(1), Sl. No. 1(b)(i) and (ii) |
| The five year barfive tax years | s.58(7) and s.58(8) |
| s.428(c) fee, delay up to one month₹ 75,000 | s.428(c)(i) |
| s.428(c) fee, thereafter₹ 1,50,000 | s.428(c)(ii) |
| Return due date where the accounts are audited under any law31 October | s.263(1)(c), Table Sl. No. 2 |
| Return due date for a business or profession NOT required to be audited31 August | s.263(1)(c), Table Sl. No. 3 |
| The audit report formForm No. 26, Parts A to D | rule 47 |
| The statutory revision window for the audit reportthe end of the financial year succeeding the tax year | rule 47(3) |
Why no turnover is computed for futures and options, for intraday, or for any other speculative business
- The Act defines no turnover. s.63 says total sales, turnover or gross receipts in business and stops, and there is no definition of turnover in s.2 or in s.66.
- The Rules define none either. Form No. 26 Part D clause 12(d) asks for total turnover and defines it nowhere.
- The working authority is the ICAI Guidance Note on Tax Audit, which is professional guidance to the auditor and has no statutory force.
- The Guidance Note changed its own position between editions: option premium on sale was part of the computation in the 2014 edition and was dropped in the 2022 edition. Practitioners disagree on it to this day.
- Nothing has been published mapping any of it onto s.63 of the Income-tax Act, 2025. It is a 44AB era method applied to a section nobody has restated it for.
The classification is settled and is on the page: exchange traded futures and options through a registered intermediary on a recognised exchange with a time stamped contract note is a specified derivative transaction and so a non speculative business, while equity squared off without delivery is speculative and is a business distinct and separate from every other. It is the MEASUREMENT that is not settled. Enter the figure your method gives, and say in the report which method it was.
07 / One client at a time
The question is never one client
A firm asks this for every client with a business, every year. OptiReports reads each client's books from Tally for the tax audit report, so the turnover and the cash figures come off the client's own ledgers and not off a recollection in June.
Nothing leaves this page
Every figure is computed in your own browser as you type. Nothing is sent, stored or logged, and there is no account. Close the tab and the working is gone.
Assumptions and basis
What this calculator applied
- Law applied
- Tax year 2026-27, Income-tax Act, 2025, as amended by the Finance Act, 2026
- Rates checked
- Checked on 19 September 2026
17 notes on how the law was applied
- The Income-tax Act, 2025 is in force from 1 April 2026, so it governs tax year 2026-27. The Act replaces the previous year and the assessment year with a single tax year, which is why no assessment year is named above.
- THE EXPOSURE CHANGED AND THIS IS THE PART TO READ TWICE. s.446 as originally enacted was the audit penalty, the lesser of 0.5 percent of turnover and Rs 1,50,000, and discretionary. The Finance Act, 2026 s.101 substituted a wholly new s.446, which is a crypto-asset statement penalty, and s.96 substituted new ss.427 and 428, where the audit default reappears as a FEE in s.428(c): Rs 75,000 for a delay up to one month and Rs 1,50,000 thereafter. Both take effect on 1 April 2026, the day the Act itself commences, so the 0.5 percent penalty never had an operative tax year under this Act. No figure for it is produced here for this year. Any page showing 0.5 percent of turnover for tax year 2026-27 is reading a repealed section.
- The fee carries no reasonable cause defence. s.470 saves penalties and opens on ss.441, 442, 446 and 448; s.428 is not in that list and never was, because s.428 is a fee and not a penalty. s.471's hearing and approval machinery is expressed as an order imposing a penalty under Chapter XXI and does not reach a fee either. Three things about it are NOT established and are reported as open rather than resolved: the date the one month delay runs from, the effect of the change from OR to AND in the clause, and whether the fee can be raised in an intimation at all and so whether there is any appeal.
- THE RETURN DUE DATE MOVED. The Finance Act, 2026 s.66(a) substituted s.263(1)(c) and split out a new row at 31 AUGUST for a business or profession whose accounts are not required to be audited. The bare law's single 31 July row is superseded. The specified date under s.63(5)(a) is one month prior to the due date, so a stale due date moves the fee trigger with it.
- The specified date has one arithmetic and two readings and they part company on one row. One month prior to 31 October is 30 September on either. One month prior to 30 November, the transfer pricing row, is 30 October read literally and 31 October on the reading the profession has long used. The section does not choose. The earlier date is reported, because it is the conservative one for a charge that runs on delay, and the other is shown beside it.
- The report is on FORM NO. 26 under rule 47 of the Income-tax Rules, 2026. Part A where the person is audited under another law, Part B where not, and the particulars in Parts C and D. Part A is the old 3CA, Part B the old 3CB, Parts C and D the old 3CD. Any page naming 3CA, 3CB or 3CD for this year is wrong. rule 47(3) adds a statutory revision window that has no counterpart read for the earlier year.
- s.63 reaches EVERY PERSON. A co-operative society is inside it on the same monetary tests as anyone else, with no special threshold, and its real question is the timing of s.63(4) rather than any threshold. A company is inside it too and, being audited under the Companies Act in every case, always files Part A and is always on the audited return due date. An LLP is a firm and a person but is excluded from s.58 entirely, because both assessee terms in s.58(11) read a firm other than a limited liability partnership, so an LLP can never use s.63(2) to switch the audit off.
- The LLP Act, 2008 and the LLP Rules, 2009 are not on disk, so the LLP audit threshold is asked as a yes or no question and never computed. It decides which row of the return due date table applies and therefore the specified date.
- The audit is not only a turnover test. s.63(1) Sl. No. 2 reaches a lower than deemed claim with no exemption limit condition at all, while s.58(3) attaches one; s.58(8) makes the five year bar a trigger in its own right and Form No. 26 Part D clause 9 gives it a box of its own; s.61(3) makes the audit a CONDITION of the s.61(2) Sl. Nos. 4 and 5 opt out; and s.59(4) puts a books and audit obligation on a non-resident with royalty or fees for technical services through an Indian permanent establishment, with no threshold and on its own form.
- s.63(1), Sl. No. 1 is applied on the words of the section. The limit must be EXCEEDED, so turnover of exactly one crore does not trigger an audit, and the ten crore substitution needs the cash receipts test AND the cash payments test. One of them alone lifts nothing.
- Leave the payments box empty and this page does NOT treat the payments test as passed. A nil denominator has no five percent of anything, and reading an unanswered question as a satisfied condition would hand over the ten crore limb and switch the audit off on figures nobody entered.
- s.63(5)(b) deems a cheque or bank draft that is not account payee to be a payment OR a receipt in cash, where s.58(9) deems it cash for RECEIPTS only and only for the business and profession entries of the scheme table. So the payments limb of the ten crore test has a cash deeming rule the scheme sections do not, and a client who banks every rupee by ordinary cheque can still fail it. Enter those instruments in the two non account payee boxes and watch the limb move.
- The cash tests are measured on the aggregate of all amounts RECEIVED and all payments MADE by the person, which can be wider than turnover on one side and wider than expenditure on the other. Enter the aggregates. Where you enter turnover instead, the denominator is too small, the ratio too high, and this page is more likely to put you on the one crore limb than the section is, which errs towards an audit and not away from one.
- The maximum amount not chargeable to income-tax is an INPUT and was not verified for this page. Two triggers turn on it: s.58(3) and s.58(8), each of which needs its own first limb as well. The figure moves with the regime and with age. Put your client's own in.
- This page does not compute a turnover for derivatives, for intraday equity or for any other speculative business, and will not. The classification is settled and is stated: exchange traded futures and options through a SEBI registered intermediary with a time stamped contract note is a specified derivative transaction and so a NON speculative business, while equity squared off without delivery is speculative and is a distinct and separate business. The MEASUREMENT is not settled, for five separate reasons that are on the page beside the box. Enter the figure your method gives and say in the report which method it was.
- An unanswered question is not a nil answer anywhere on this page. Where a fact would buy a relief and was not stated, the relief is not granted and the page names the question instead of deciding it. Where a trigger cannot be settled on the facts given, the verdict is "cannot determine" and not "not required".
- Nothing here is a return, a report or advice. It is a working you can tick against your own.
This is a working estimate, not advice, and it will not cover every case. Rates and thresholds change. Check the figure against the law as it stands before you rely on it or sign anything. All calculators