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Pardeep Jha & Associates Chartered Accountants

Services

Tax Audit Services (Sec 44AB) in Kharar & Tricity

Statutory tax audit under Sec 44AB — programmatic ledger reconciliation, zero-variance Form 3CB-3CD, and on-time IT portal filing. Office in Kharar; pan-India clients served remotely.

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What you get

Outcomes

  • Zero-variance audit report — all broker ledgers, Form 26AS, AIS, and TIS reconciled to zero before signing
  • F&O absolute turnover calculated to ICAI guidelines — correct threshold determination, no guesswork
  • Form 3CB-3CD generated from structured data, not manual entry — all 44 clauses completed
  • Section 271B penalty avoided — audit filed and e-acknowledged before the September 30 deadline
  • 50,000-plus row broker ledgers ingested algorithmically — no Excel crashes, no missing trades
  • ITR-3 or ITR-4 filed in sync with the audit report — no mismatch notices from the IT department

Section 44AB of the Income Tax Act requires a mandatory audit when your business turnover or professional receipts cross the prescribed threshold for the financial year. The compliance is non-negotiable — but what separates a defensible return from one that generates notices is the rigour of the reconciliation that precedes the signature on Form 3CD.

At PJA, the process is programmatic. Broker P&L files, bank statements, AIS/TIS portal data, and Form 26AS are ingested and cross-matched algorithmically before the audit report is opened. We sign only after the reconciliation resolves to zero variance. For high-volume F&O traders with tens of thousands of transactions, that means no Excel crashes and no missing trades. For business owners and professionals, it means a Form 3CD that reflects your actual books, clause by clause.

Audit thresholds

Who is required to get audited

Digital businesses

₹10 Cr

Where cash receipts and payments are less than 5% of total gross turnover.

Standard businesses

₹1 Cr

Where cash transactions exceed 5% of total gross receipts or payments.

Professionals

₹50 L

Freelancers, doctors, lawyers, and consultants under Sec 44ADA.

Who we audit

Taxpayer categories under Sec 44AB

The statute covers four distinct taxpayer profiles, each with a different threshold, form type, and reconciliation complexity. Getting the category wrong at the outset produces an incorrect Form 3CD.

SME and trading businesses

Proprietary firms, partnerships, and LLPs in trading, manufacturing, and services. Cash-heavy businesses apply the one-crore limit; businesses running 95% or more digital transactions use the ten-crore threshold. We map your transaction mix in the scoping review so the threshold is never misapplied.

Professionals and consultants

Doctors, lawyers, architects, engineers, and management consultants under Sec 44ADA. If gross receipts exceed fifty lakhs, or you opt out of presumptive taxation to declare income below the statutory rate, an audit is required. We handle Form 3CB-3CD filing end to end.

F&O and derivative traders

F&O income is non-speculative business income, not capital gains. Absolute turnover — the sum of absolute values of all profit and loss differences across trades — determines the audit threshold. We parse full-year ledgers from Zerodha, Upstox, Angel One, and ICICI Direct programmatically. Net loss does not eliminate the audit requirement.

Businesses opting out of presumptive taxation

If your actual profits fall below the presumptive rate under Sec 44AD or 44ADA and you elect to declare the lower figure, an audit is mandatory regardless of turnover level. This exposure is confirmed during scoping — clients are never caught off-guard when the return is due.

Methodology

Manual reconciliation vs. the PJA standard

The conventional approach

Spreadsheet-driven, manually checked

  • 50,000-plus F&O trades loaded into Excel — crashes, missing rows, and manual spot-checks on a subset
  • Form 3CD filed without verifying AIS/TIS portal data against broker P&L statements
  • Form 26AS reviewed informally if at all — TDS mismatches surface as notices months after filing
  • Blank or boilerplate entries in Form 3CD clauses the CA could not verify from incomplete data

PJA methodology

Programmatic ingestion, zero-variance sign-off

  • Full-year broker ledgers parsed algorithmically — every row, every trade, absolute turnover to the rupee
  • AIS/TIS matched to broker P&L and bank statements before the audit report is opened
  • Form 26AS reconciled line by line — every TDS credit, advance tax challan, and self-assessment entry
  • All 44 Form 3CD clauses completed from verified data; signed only after reconciliation confirms zero variance

A tax audit that is done but not verified is a liability. We sign nothing before the reconciliation closes to zero.

CA Pardeep Jha · Founding Partner, Kharar

Methodology

How we work

  1. Scope determination

    We review your turnover, cash-to-digital transaction mix, income classification (business vs. professional), and trading activity to confirm audit applicability, identify the correct form type (3CA/3CB + 3CD), and list every data source we need from you.

  2. Data ingestion and reconciliation

    Broker P&L files, bank statements, AIS/TIS portal data, and Form 26AS are ingested programmatically. We run automated cross-matching across all sources before the audit is opened — variances are resolved at this stage, not discovered after signing.

  3. Computation and income mapping

    We prepare the income computation, calculate absolute turnover for F&O traders under ICAI methodology, classify all income streams, and identify deductible business expenses including terminal fees, advisory costs, and software subscriptions under Sec 37.

  4. Audit report drafting

    Form 3CB (or 3CA) and the 44-clause Form 3CD are drafted from reconciled data. Every clause is populated from verified figures. An internal review runs against the reconciliation output before the CA signs off.

  5. E-filing and handover

    The audit report is filed on the IT portal before September 30. You receive signed forms, working papers, income computation, reconciliation report, and the filing acknowledgment — a complete paper trail for any future inquiry or reassessment.

Scope

What's included

  • Form 3CB and Form 3CD — e-filed, signed audit report with all 44 clauses completed
  • Form 3CA where applicable (business already audited under the Companies Act)
  • Income computation statement with all deductions, disallowances, and tax liability mapped
  • Absolute turnover computation for F&O and derivative traders (ICAI methodology)
  • AIS/TIS to broker P&L reconciliation report confirming zero variance at sign-off
  • Form 26AS match confirmation — every TDS credit, advance tax, and self-assessment challan
  • Bank reconciliation statement across all operating accounts and the full financial year
  • Business expense schedule — terminal fees, software, internet — Sec 37 compliant
  • Management representation letter with all required statutory declarations
  • ITR-3 or ITR-4 e-filing acknowledgment linked to the audit report

Common questions

Frequently asked

What is the penalty if I miss the tax audit?
Under Section 271B, the penalty is 0.5% of your total turnover or gross receipts, up to a ceiling of 1,50,000 rupees. The penalty applies if you fail to get the audit done, file the audit report after September 30, or submit a materially incorrect Form 3CD. We manage all three exposure points — structured data intake, internal review of every clause, and filing well ahead of the deadline. We typically complete the engagement and file by mid-September to retain buffer for revision requests.
What is the difference between Form 3CA, Form 3CB, and Form 3CD?
Form 3CA is the audit report used when a business is already required to be audited under another law — the Companies Act, for instance. Form 3CB is for businesses and professionals being audited solely under Sec 44AB. Form 3CD is the detailed 44-clause statement of particulars that is always attached to whichever report applies. If you are a sole proprietor, partnership, or LLP not otherwise audit-mandated, you will receive Form 3CB plus Form 3CD. We determine the correct form type as the first step of every engagement.
I traded F&O and made a net loss this year. Do I still need an audit?
In most cases, yes. F&O trading is classified as non-speculative business income regardless of profit or loss. What triggers the audit requirement is absolute turnover — the sum of the absolute values of all positive and negative trade differences across the financial year. If that figure crosses 10 crore rupees (assuming 95% or more digital transactions), an audit is mandatory. Net loss does not reduce absolute turnover. Misunderstanding this point and filing without an audit when turnover crosses the threshold is one of the most common defective return triggers we see.
When is the due date for the audit report and the ITR?
The audit report must be filed electronically by September 30 of the assessment year. The corresponding ITR — typically ITR-3 for F&O traders and most business taxpayers — must follow by October 31. Both deadlines are firm. A missed audit report blocks the ITR filing system entirely, so the two filings must be coordinated. We treat them as a single integrated engagement and send you filing acknowledgments for each.
My turnover is just below the threshold. Can I skip the audit?
If your turnover is genuinely below the applicable threshold and you have not opted out of presumptive taxation under Sec 44AD or 44ADA, an audit is not required. However, if you opt out of the presumptive scheme to declare lower-than-statutory profits — for example, because your actual margin is below 8% — you must maintain books of accounts and get audited regardless of turnover. We confirm audit applicability after reviewing your full situation, so there are no surprises when the return is filed.
How long does the process take and what do you need from me?
For a straightforward proprietary business with clean books, the audit is completed in five to seven working days. For high-volume F&O traders with multiple broker accounts, or for partnerships and LLPs with complex structures, allow ten to fifteen working days. We need: broker P&L statements for the full financial year from each platform, all bank statements, access to your accounting software (Tally, Zoho, or QuickBooks), the AIS and Form 26AS download from the IT portal, and any existing financial statements. We send a data checklist immediately after the scoping call.

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Book a 30-minute discovery call. We'll scope the engagement, confirm deliverables, and give you a fixed-fee proposal within 48 hours.

Book a consult WhatsApp us +91 6391 110 333