
<p class="wp-block-paragraph"> Hello Dear CA Students,</p>



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<p class="wp-block-paragraph"><em>We are Sharing With You Confused About Tax Audit Applicability? Here&#8217;s a Clear Flowchart to Help You Decide! . So kindly Check Out our www.castudynotes.com website and ALL the Best for Your upcoming Exams.</em></p>
<cite>CA STUDY NOTES</cite></blockquote>


<div class="wp-block-image">
<figure class="aligncenter size-large has-lightbox"><img src="https://castudynotes.com/wp-content/uploads/2021/03/Join-US-640x148-1.png" alt="A flowchart demonstrating the steps to determine tax audit applicability based on business and profession criteria, highlighting key income thresholds and requirements." data-amp-lightbox="true" lightbox="true" class="wp-image-99"/></figure>
</div>


<p class="wp-block-paragraph">â<strong> Confused About Tax Audit Applicability?</strong></p>



<p class="wp-block-paragraph"><strong> Here&#8217;s a Clear Flowchart to Help You Decide!<br></strong><br>â <strong>Step 1: Identify the Type of Assessee</strong><br>Ask: Is the person carrying on Business or Profession?<br><br>ð¸ If Profession:<br>Check if Gross Receipts exceed â¹50 lakhs in the financial year.<br>Yes → Tax Audit is Applicable<br>No → Tax Audit is Not Applicable<br>ð¸ If Business:<br>Check if Turnover exceeds â¹1 crore<br>Yes → Go to next step<br>No → Check if Section 44AD (Presumptive Taxation) is applicable<br><br>ð¹<strong> Case 1: Turnover > â¹1 crore</strong><br>Check if Cash Receipts and Cash Payments are both ≤ 5% of total receipts/payments:<br>Yes → Turnover limit for audit increases to â¹10 crores<br>If Turnover > â¹10 crores → Tax Audit Applicable<br>If Turnover ≤ â¹10 crores → Tax Audit Not Applicable<br>No → Tax Audit Applicable (Limit stays at â¹1 crore)<br><br>ð¹ <strong>Case 2: Turnover ≤ â¹2 crores and 44AD Opted</strong><br>Has the person opted for Presumptive Taxation under Section 44AD?<br>Yes → Check Profit Declared:<br>If Net Profit <; 6% (if digital receipts) or <; 8% (cash), and Total Income exceeds basic exemption limit → Tax Audit Applicable<br>Otherwise → Tax Audit Not Applicable<br>No → Tax Audit Not Applicable<br><br>â <strong>Summary:<br></strong>Category Threshold Tax Audit Required?<br>Profession Gross Receipts > â¹50 Lakhs Yes<br>Business Turnover > â¹1 Cr (if >5% cash) Yes<br>Business Turnover ≤ â¹10 Cr (if ≤5% cash) No<br>44AD Opted Profit <; 6%/8% + Income > BEL Yes<br><br>â <strong> Found this helpful? Hit ð and share with someone who needs this!</strong></p>


<div class="wp-block-image">
<figure class="aligncenter size-full"><img src="https://castudynotes.com/wp-content/uploads/2025/06/image-2.png" alt="Flowchart illustrating tax audit applicability based on business or profession status, gross receipts, turnover thresholds, and cash transaction limits." class="wp-image-25935"/></figure>
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