Check Income Tax Audit Applicability

Tax audit applicability calculator (India)

Quicko’s tax audit applicability calculator helps you determine whether a tax audit is required for your business or professional income under the Income Tax Act 2025. By entering your turnover, gross receipts, cash receipts/payments, and profits, you can quickly check audit applicability under Section 63.

It also considers presumptive taxation eligibility under Section 58, simplifying rules around turnover limits, profit thresholds, and cash transactions.

Tax audit applicability at a glance

• Business turnover above 1 crore may require a tax audit

• Business turnover up to 10 crore may not require an audit if cash receipts/payments are within limits

• Professional gross receipts above 50 lakh require a tax audit

• Presumptive taxation with lower declared profits can trigger audit applicability

Audit applicability is evaluated separately for each financial year.

What is tax audit?

A tax audit is a review of books of accounts conducted by a Chartered Accountant to verify that income, expenses, and deductions are reported correctly under Income Tax Act 2025. Audit provisions are primarily governed by Section 63.

The purpose of a tax audit is to ensure accurate reporting and compliance with tax laws.

When is tax audit applicable?

Audit applicability depends on income type and thresholds:

• Businesses may require an audit if turnover exceeds prescribed limits

• Professionals must undergo an audit if gross receipts cross the threshold

• Presumptive taxpayers may require audit if declared profits are below minimum rates under Section 58, or if the scheme is opted out

Cash transaction limits also affect eligibility for enhanced presumptive thresholds.

Tax audit limits explained

Business

• Up to ₹1 crore: audit may not be required if mostly digital

• ₹1–10 crore: audit depends on cash usage and presumptive taxation

• Above ₹10 crore: audit required under Section 63

Professionals

• Up to ₹50 lakh: presumptive allowed, audit may not be required if conditions met

• ₹50–75 lakh: enhanced presumptive allowed only if cash ≤5%

• Above ₹75 lakh: audit required

Presumptive taxation and audit

• Presumptive taxation under Section 58 allows taxpayers to avoid audit if profits meet prescribed rates

• Audit becomes applicable if:

  • Declared profits are below the required percentage

  • Presumptive scheme is opted out and income exceeds exemption limit

How the calculator works

1. Select your income type — business, profession, or both

2. Enter annual turnover or gross receipts

3. Indicate percentage of cash receipts and payments

4. Specify if you opted for presumptive taxation, if eligible

5. Enter declared profit

The calculator applies statutory conditions under Sections 58 and 63 to display if a tax audit is applicable.

Who should use this calculator?

• Small and medium business owners

• Professionals such as doctors, lawyers, consultants, and architects

• Presumptive taxpayers under Section 58

• Individuals unsure about audit limits or compliance

It helps plan compliance and avoid last-minute penalties.

Key points to remember

• Audit depends on turnover or gross receipts, not on profit/loss alone

• Loss-making businesses may still require audit

• Presumptive taxation provides audit relief only if rules are followed

• Audit applicability should be reviewed every financial year

Common mistakes

• Assuming losses avoid audit

• Ignoring turnover limits while opting for presumptive taxation

• Misunderstanding thresholds (1 crore, 10 crore, 50 lakh)

• Incorrectly calculating cash receipts

• Assuming audit rules are static across years

Tax audit report due date

When audit applies, the report must be filed within the prescribed due date under Section 63. Missing the date may lead to penalties.