Basic Threshold Limits
• Tax audit under Section 44AB applies if business turnover exceeds ₹1 crore
• For businesses with 95% or more digital transactions, the limit is ₹10 crore
• For professionals, tax audit is mandatory if gross receipts exceed ₹50 lakh
• These limits apply to HUFs engaged in business or professional activities
• HUF must maintain proper books of accounts if these thresholds are crossed

Applicability Under Presumptive Taxation
• HUFs opting for presumptive taxation under Section 44AD are exempt from audit
• However, if the HUF declares income less than 8% (or 6% for digital) and total income exceeds basic exemption, audit becomes mandatory
• Similarly, under Section 44ADA, audit is needed if income is declared below 50% of receipts
• If presumptive scheme is opted and conditions are met, tax audit is not required

Form and Due Date
• Tax audit report must be submitted in Form 3CA/3CB along with Form 3CD
• Report must be signed by a practicing Chartered Accountant
• The due date for audit report submission is 30th September (or notified date)
• Filing the audit report is mandatory before filing the ITR for that year
• Non-compliance may lead to penalties under Section 271B

Books of Accounts and Recordkeeping
• HUF under audit must maintain detailed books like cash book, ledger, invoices, etc.
• Maintain records of income, expenses, assets, loans, and capital accounts
• Books should be maintained at the principal place of business
• Records must be preserved for 8 years for assessment or scrutiny
• Auditors verify these books to certify compliance and correctness

Penalties for Non-Compliance
• Penalty under Section 271B is 0.5% of turnover or ₹1,50,000, whichever is lower
• Delay or failure in submitting audit report can trigger scrutiny
• Penalty may be waived under Section 273B if reasonable cause is proven
• Ensuring timely and accurate audit protects the HUF from legal and financial issues
• Engage a qualified CA early to manage audit processes smoothly