Significant changes in the Guidance Note on Tax Audit under section 44AB of 1G61 Act
| Page No. | Para No. | Nature of Change |
| Abbreviations | Added TAQRB and AOP/BOI to the list of abbreviations. | |
| 19 | Para 5.13 | Included Virtual Digital Assets (VDAs) and Carbon Credits under the term “gross receipts in business”. |
| 21 | Para 5.14 | Added that the following items would not form part of “gross receipts in business’- Bad Debts recoverySection 41 – Remission of LiabilityCapital Receipt (Not Credited to statement of PCL) |
| 39 | Note 2 | Added a relevant note regarding revision of tax audit originally conducted by another member |
| 40 | Para 9.36 | Added a clarification that if more than one branch office of an auditee is audited by the same auditor, it should be counted as one tax audit assignment. |
| 40 | Para 9.38 | Incorporated a point relating to UDIN |
| 41 | Para 10 | Updated Para 10 in line with the Guidance Note on Financial Statements of Non-Corporate Entities and the Guidance Note on Financial Statements of LLPs, along with the Appendix XXIII and XXIV |
| 52 | 13.13 to 13.15 | Inserted a new paragraph discussing the implications of the Digital Personal Data Protection (DPDP) Act, 2023. |
| 53 | Para 13.16 | Inserted new Para stating that this is the last edition of the Guidance Note on Tax Audit under section 44AB of the Income-tax Act, 1961. |
| Various | Relevant Clauses | Incorporated TAQRB observations relating to irregularities, deficiencies, and common errors observed during review of tax audit reports, with an appropriate disclaimer. |
| Appendix IXA | Appendix IXA | Revised the Sample Management Representation Letter in line with the format published by the AASB in its publication FAQs on Management Representation Letter (MRL). |
Last Date for receiving comments on the Guidance Note – 25.07.2026
Terms, Abbreviations used in this
Guidance Note
In this Guidance Note, the following terms and abbreviations occur often in the text. A brief explanation of such terms and abbreviations is given below. Further, reference to a section without reference to the relevant Act means that the section has reference to the Income-tax Act, 1961.
| (a) | Act | The Income-tax Act, 1961. |
| (b) | Accountant | Accountant means a chartered accountant within the meaning of the Chartered Accountants Act, 1949, as referred to in section 288 of the Income-tax Act, 1961. |
| (c) | AS | Accounting Standards notified vide the Companies (Accounting Standards) Rules, 2021 for company assessees not required to follow Ind AS and Accounting Standards as prescribed by the Institute of Chartered Accountants of India for non company assessees. |
| (d) | Assessee | As defined in section 2(7) of the Act. |
| (e) | AY | Assessment Year as defined under section 2(9) of the Act. |
| (f) | Audit report | Any report submitted in Form No. 3CA/3CB along with the statement of particulars in Form No. 3CD. |
| (g) | AOP/BOI | Association of Persons/ Body of Individuals is treated as a person u/s 2(31) of the Income Tax Act, 1961 |
| (h) | Board/CBDT | The Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963. |
| (i) | Circular | A circular or instructions issued by the Board under section 119(1) of the Act. |
| (j) | Form or Forms | Collectively refer to Forms 3CA, 3CB and 3CD. |
| (k) | HUF | Hindu Undivided Family. |
| (l) | ICAI/Institute | The Institute of Chartered Accountants of India. |
| (m) | ICDS | Income Computation and Disclosure Standards issued by the Board u/s 145 of the Act. |
| (n) | Ind AS | The Indian Accounting Standards (Ind AS), as notified vide Companies (Indian Accounting Standards) Rules, 2015 along with the amendments notified from time to time. |
| (o) | Limited Liability Partnership (LLP) | As defined in the Limited Liability Partnership Act, 2008. |
| (p) | Person | As defined in section 2(31) of the Act. |
| (q) | Previous year | As defined in section 3 of the Act. |
| (r) | Rules | The Income-tax Rules, 1962. |
| (s) | SA | Standards on Auditing issued, prescribed and made mandatory by the Institute of Chartered Accountants of India. |
| (t) | STT | Securities transactions tax leviable under Chapter VII of the Finance (No.2) Act, 2004. |
| (u) | Tax audit | The audit carried out under the provisions of section 44AB of the Act. |
| (v) | Tax auditor | Auditor appointed by an assessee to carry out tax audit under section 44AB of the Act. |
| (w) | TAQRB | Taxation Audits Quality Review Board |
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