Tax Audit u/s 44AB for Transport Business A proprietorship is engaged in transportation business and

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This discussion clarifies the mandatory tax audit requirements for a transport business operating as a proprietorship. Even if the turnover is below ₹10 crore and digital transactions exceed 95%, a tax audit under Section 44AB(c) is mandatory if the declared profit is lower than the presumptive income calculated under Section 44AE. This rule applies irrespective of the number of trucks or the percentage of cash transactions.

Javed Memon

Javed Memon (Querist)

18 September 2026
A proprietorship is engaged in transportation business and owns 8 heavy goods vehicles, each having 25-ton GVW, owned throughout the year.

Turnover: ₹3.50 crore

100% receipts through digital/banking channels

Profit declared: 3% = ₹10.50 lakh

44AE presumptive income: 8 × 25 tons × ₹1,000 × 12 months = ₹24 lakh

Since the assessee declares income lower than the amount prescribed u/s 44AE, is tax audit u/s 44AB(c) mandatory?

Also, considering that turnover is below ₹10 crore and cash receipts/payments are within 5%, would 44AB(a) apply, or is 44AB(c) the correct clause?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

19 September 2026 Yes, a tax audit is mandatory, and Section 44AB(c) is the correct clause.
Even though the total turnover is below the ₹10 crore digital threshold, not declaring the minimum profit as per the presumptive taxation scheme under Section 44AE i.e. by declaring lower profits automatically triggers a mandatory audit under the specific provisions of Section 44AB(c)

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Javed Memon

Javed Memon (Querist)

03 October 2026 So For transporation business Having less then 10 Truck and Irrespective of 5 % Cash receipt or Payment and Turnover is 1 crore or more i.e 5 crore or 10 Crore if we declare Profit Lower than 44 AE then always 44 AB (c) applicable ??

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

03 October 2026 Correct.

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