TAX AUDIT · SECTION 44AB · FORM 3CD · FORM 26

Review exceptions. Not schedules.

Books, income-tax and GST are reconciled before you open the file. Each result goes where it belongs — a clause figure, an observation, or a question only the client can answer — with the section and the voucher attached.

Form 26, ready

Under the Income-tax Act, 2025, tax audits for tax year 2026-27 are reported in Form 26. Corelytix maps every Form 26 item to the Form 3CD clause it replaces, so last year's answers carry forward and new questions stand out.

467 / 467 checks against an independent key

Every exception has exactly one place to go.

ROUTE 1 · CLAUSE FIGURE

You accept it

TDS that was due but not deducted becomes a 34(a) row and a 21(b) disallowance at 30%. 26AS receipts missing from the books become a 16(d) amount. Shown with the evidence list beside the figure.

ROUTE 2 · OBSERVATION

It drafts the remark

A gap between books, GSTR-1 and 3B; turnover that differs from AIS; credit claimed before it reached 2B. Drafted into the observations register with its profit impact, for paragraph 3 of Form 3CA or paragraph 5 of Form 3CB.

ROUTE 3 · QUESTION

Only the client knows

Books ahead of 26AS; a purchase in 2B that was never booked. These become the client query list — and the answers become specific representations, with amounts, not a boilerplate letter.

What is worked for you, clause by clause

Form 3CD numbering for FY 2025-26, with the Form 26 item that replaces it from tax year 2026-27.

Form 3CD	Form 26	Subject	What Corelytix does
8	9	Applicability of 44AB	Turnover from books, GSTR-1 and AIS; ₹1 crore or ₹10 crore limit from the cash percentages; flags when the sources disagree.
16(d)	21	Receipts not credited to P&L	26AS Part A matched to each customer by TAN, then by name; GSTR-1 invoices missing from the books.
21(b)	51(a)	s.40(a)(ia) disallowance	30% of the base where TDS was not deducted, or not deposited by the return due date.
21(d)	30, 31	Cash payments, s.40A(3) and 40A(3A)	Payments above ₹10,000 a day per payee, rule 6DD exceptions, payments in later years for earlier expenses.
22	33	MSME dues, s.43B(h)	Ageing of micro and small creditors against the 15 and 45-day limits; amounts unpaid at year end.
31	45	Loans and repayments, ss.269SS, 269T, 269ST	Cash and bearer instruments of ₹20,000 or more for loans; ₹2 lakh for 269ST receipts.
34(a)	50(a)	TDS due vs deducted	Section engines with FY thresholds and rates; 206AA, lower-rate certificates, transporter declarations.
34(b)	50(b)	Statements not reported	Each deduction matched to the filed 26Q or 27Q rows.
34(c)	50(c)	Interest under s.201(1A)	Challans applied oldest first; 1.5% for each month or part.
35	53	Quantitative details	From Tally's stock records.
40	12(d)	Ratios	Gross profit, net profit, stock-in-trade and material consumed, with the prior year.
44	52(b)	GST expenditure split	Expenses grouped by the supplier's GST status: registered, composition, exempt, unregistered.

From engagement to upload

1 · Accept

Before fieldwork

Entity type and reporting framework, independence, the letter to the previous auditor, your tax-audit count, the engagement letter. Coming

2 · Reconcile

Books, income-tax, GST

The portal files are downloaded and checked for freshness; runs older than their data are refused.

3 · Review

Exceptions, by route

Accept clause figures, edit the observations, send the client query list. Prepared and reviewed by different people.

4 · Sign and lock

A file that holds

The file locked as a hashed revision, reopened only with a reason. UDIN and the 60-day SA 230 assembly clock Coming

Bring one tax audit client to the walkthrough.

We will run the reconciliations on their books and portal data while you watch.

Book a walkthrough