tax vs statutory audit
This query is : Resolved
30 July 2010
Hello expert,
1) What is the diff. b/w tax audit & statutory audit?
2)to whom is tax audit applicable?
3)for a Pvt. ltd. company are both tax & stat. audit applicable?
thanks.
kirti
1) What is the diff. b/w tax audit & statutory audit?
2)to whom is tax audit applicable?
3)for a Pvt. ltd. company are both tax & stat. audit applicable?
thanks.
kirti
30 July 2010
Statutory Audits are those mandated by a statute. So by that definition even tax audit is a statutory audit.
Statutory audit (under the Companies Act) include statutory financial audit and statutory cost audit. Statutory Financial audit is conducted by a Chartered Accountant and Statutory Cost Audit is conducted by a Cost Accountant. The statutory financial audit is compulsory for all companies where as Statutory cost audit is applicable only to certain industries on fulfilling certain criteria.
Similarly Tax Audit (Section 44 AB) under the Income Tax Act is done by a Chartered Accountant.
Statutory audit (under the Companies Act) include statutory financial audit and statutory cost audit. Statutory Financial audit is conducted by a Chartered Accountant and Statutory Cost Audit is conducted by a Cost Accountant. The statutory financial audit is compulsory for all companies where as Statutory cost audit is applicable only to certain industries on fulfilling certain criteria.
Similarly Tax Audit (Section 44 AB) under the Income Tax Act is done by a Chartered Accountant.
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30 July 2010
For Every company having gross receipts from business of Rs.40 Lacs or more (60 Lacs from FY 2010-11) tax audit is mandatory. But statutory financial audit is mandatory in any case.
30 July 2010
sanjay ji,
say if a company has turnover of 2crores then both statutory & tax audit are applicable as gross receipts > 40/60L?
similarly if t/o is 35 lakhs then only statutory audit is applicable......am i correct?
thnx.
say if a company has turnover of 2crores then both statutory & tax audit are applicable as gross receipts > 40/60L?
similarly if t/o is 35 lakhs then only statutory audit is applicable......am i correct?
thnx.
30 July 2010
Absolutely Correct
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30 July 2010
Statutory audit is conducted under companies act Whereas Tax audit is as per Income tax Act.
There is no turnover or gross receipts concepts for Tax audit(40 lakh for those who carrying on Business and 10 lakh for those who carry on services).
There is no turnover or gross receipts concepts for Tax audit(40 lakh for those who carrying on Business and 10 lakh for those who carry on services).
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01 February 2012
Is tax liability worked out & tax deposited under tax audit? or tax audit only involves auditing & reporting under form 3CD?
26 July 2025
Here’s a concise breakdown of **Tax Audit vs Statutory Audit**, based on your discussion:
---
## 1. **Difference between Tax Audit and Statutory Audit**
| Aspect | Statutory Audit | Tax Audit |
| ------------- | ------------------------------------------------------------------------------ | ---------------------------------------------------------------------- |
| Governing Law | Companies Act, 2013 (or earlier Companies Act) | Income Tax Act (Section 44AB) |
| Purpose | Verify true & fair view of financial statements; compliance with Companies Act | Verify correctness of income & expenses for income tax purposes |
| Applicability | Mandatory for all companies and certain other entities | Mandatory for businesses/professionals above specified turnover limits |
| Conducted By | Chartered Accountant (CA) | Chartered Accountant (CA) |
| Report | Audit Report as per Companies Act | Tax Audit Report in Form 3CD |
| Focus | Financial position & compliance with accounting standards | Tax compliance and correct disclosure of income |
---
## 2. **To whom is Tax Audit applicable?**
* For **businesses:**
* Turnover/gross receipts exceed **₹1 crore** (previously ₹40/60 lakhs) - limits revised over years, verify current limits.
* For **professionals/services:**
* Receipts exceed **₹50 lakhs** (earlier ₹10 lakhs).
* Specific conditions apply as per Section 44AB.
---
## 3. **Applicability for Pvt. Ltd. Companies**
* **Statutory Audit:**
* Mandatory for **all companies** irrespective of turnover.
* **Tax Audit:**
* Applicable if turnover/gross receipts exceed the prescribed limits under Section 44AB.
* So, a Pvt. Ltd. company with turnover > threshold needs **both** audits.
---
## 4. **Example Clarification**
* If turnover is ₹2 crore:
* **Both Statutory Audit and Tax Audit applicable**.
* If turnover is ₹35 lakhs:
* **Only Statutory Audit applicable** (since tax audit threshold not met).
---
## 5. **Regarding Tax Liability and Tax Audit**
* **Tax Audit** is only about **verification and reporting**; it **does not involve tax computation or tax payment**.
* Tax liability is to be **calculated separately** by the taxpayer and tax must be **paid accordingly**.
* Tax Audit report (Form 3CD) helps Income Tax Department in verifying correctness of reported income.
---
If you want, I can help summarize the current turnover thresholds for tax audit or draft a checklist for you. Want me to?
---
## 1. **Difference between Tax Audit and Statutory Audit**
| Aspect | Statutory Audit | Tax Audit |
| ------------- | ------------------------------------------------------------------------------ | ---------------------------------------------------------------------- |
| Governing Law | Companies Act, 2013 (or earlier Companies Act) | Income Tax Act (Section 44AB) |
| Purpose | Verify true & fair view of financial statements; compliance with Companies Act | Verify correctness of income & expenses for income tax purposes |
| Applicability | Mandatory for all companies and certain other entities | Mandatory for businesses/professionals above specified turnover limits |
| Conducted By | Chartered Accountant (CA) | Chartered Accountant (CA) |
| Report | Audit Report as per Companies Act | Tax Audit Report in Form 3CD |
| Focus | Financial position & compliance with accounting standards | Tax compliance and correct disclosure of income |
---
## 2. **To whom is Tax Audit applicable?**
* For **businesses:**
* Turnover/gross receipts exceed **₹1 crore** (previously ₹40/60 lakhs) - limits revised over years, verify current limits.
* For **professionals/services:**
* Receipts exceed **₹50 lakhs** (earlier ₹10 lakhs).
* Specific conditions apply as per Section 44AB.
---
## 3. **Applicability for Pvt. Ltd. Companies**
* **Statutory Audit:**
* Mandatory for **all companies** irrespective of turnover.
* **Tax Audit:**
* Applicable if turnover/gross receipts exceed the prescribed limits under Section 44AB.
* So, a Pvt. Ltd. company with turnover > threshold needs **both** audits.
---
## 4. **Example Clarification**
* If turnover is ₹2 crore:
* **Both Statutory Audit and Tax Audit applicable**.
* If turnover is ₹35 lakhs:
* **Only Statutory Audit applicable** (since tax audit threshold not met).
---
## 5. **Regarding Tax Liability and Tax Audit**
* **Tax Audit** is only about **verification and reporting**; it **does not involve tax computation or tax payment**.
* Tax liability is to be **calculated separately** by the taxpayer and tax must be **paid accordingly**.
* Tax Audit report (Form 3CD) helps Income Tax Department in verifying correctness of reported income.
---
If you want, I can help summarize the current turnover thresholds for tax audit or draft a checklist for you. Want me to?
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