Section 44ABAA (inserted by Finance Act 2024, w.e.f. AY 2025-26) regarding compulsory Tax Audit in certain cases even if Turnover is below INR 1 Crore
This is a new audit requirement separate from 44AB.
It says:
If the aggregate of cash receipts OR aggregate of cash payments exceeds 5% of total receipts/payments of the business, then Tax Audit under section 44ABAA is compulsory, even if 44AB audit is not applicable.
How it works (with example):
Normally, under 44AB:
Audit not needed up to turnover ₹10 crore if cash ≤ 5%.
If cash > 5%, then turnover audit limit falls back to ₹1 crore.
Now with 44ABAA:
Even if turnover is below ₹1 crore and profit is above 8% (so 44AB would not apply), but if cash > 5%, then audit will still be triggered under 44ABAA.
In summary
44AB → covers turnover/profit conditions.
44ABAA → is a standalone trigger → if cash receipts OR payments > 5%, audit becomes compulsory, regardless of turnover/profit.
So, Section 44ABAA is applicable when:
A business crosses the 5% cash threshold, and otherwise audit under 44AB might not have applied (say, turnover < 1 crore with good profit). Team- Intellex Strategic Consulting Private Limited Follow us on LinkedIn: https://www.linkedin.com/company/intellexcfo-com/ https://www.linkedin.com/company/intellexconsulting https://www.linkedin.com/company/venture-streets/ https://www.linkedin.com/company/growmoreloans-com/ www.StartupStreets.com, www.GrowMoreLoans.com, www.GrowMoreFranchisees.com, www.intellexCFO.com, www.CreditMoneyFinance.com, www.StartupIndia.Club
