Section 44AB Tax Audit Essentials: Key Clauses in Form 3CD & Transfer Pricing
CA Sanjay Singhania
··ICAI Practice Verified
Executive Summary:
Critical disclosures required under Clause 44 (GST expenditure breakup), Clause 34 (TDS compliance), and domestic transfer pricing under Section 92BA.
1. Turnover Thresholds & Applicability for FY 2025-26
Under Section 44AB, businesses with turnover exceeding ₹1 Crore (or ₹10 Crores if cash transactions are ≤5%) must undergo a statutory Tax Audit and submit Form 3CA/3CB along with Form 3CD particulars signed by a Chartered Accountant.
2. Scrutiny-Sensitive Clauses in Form 3CD
- Clause 44: Detailed breakup of total expenditure incurred in respect of entities registered under GST vs unregistered entities.
- Clause 34: Complete audit of TDS/TCS compliance, rates of deduction, and disallowances under Section 40(a)(ia).
- Clause 21(a): Amounts debited to profit and loss account of personal nature or fines/penalties for violation of any law.