Applicability of 44ab Audit

This discussion clarifies the applicability of a Section 44AB audit for entities with a turnover below 1 crore and a loss in the 2020-21 financial year, especially when cash limits under 44AB have been exceeded. The applicability hinges on whether the entity opted for Section 44AD in previous years and its turnover in those periods. If Section 44AD was not chosen in any of the prior four years, a tax audit under Section 44AB(a) is generally not applicable.