Tax Audit or Not? Here’s When You Need to Get Your Books Audited in FY 2024-25!

With March 31 closing in, business owners and professionals need to finalize books — but many are unsure if tax audit applies to them. Here’s a simplified breakdown of when you need a tax audit, and how to avoid it legally.

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1. What is Tax Audit?

• A Tax Audit under Section 44AB is an audit of your business/professional books by a Chartered Accountant
• It applies only if your turnover/profits exceed certain limits, or if you’re reporting low profits

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2. Tax Audit Thresholds for FY 2024-25

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3. Presumptive Income Schemes – No Audit Needed If Opted

• Section 44AD: Small businesses with turnover < ₹2 Cr can declare 6% profit (digital) or 8% (cash)
• Section 44ADA: Professionals (CA, lawyer, designer, etc.) can declare 50% profit if receipts < ₹50 lakh

If you opt for presumptive scheme and declare the minimum % profit — audit is not required

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4. When Audit Becomes Mandatory (Even Below Threshold)

• If you don’t opt for presumptive and declare net profit < 6% / 8% / 50%, then audit becomes compulsory
• Also applies if you’re declaring losses in business or profession

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5. Due Dates:

• Audit Report due by September 30, 2025
• ITR filing (with audit) due by October 31, 2025