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Audit · CAForm 3CD and CARO 2020 — clause-wise checklists
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✓Checked against the official Act and rules · verified 28 October 2026
Form 3CD · rule 6G(2) · section 44AB
Tax audit report — Form 3CD
| Clause | What to report and check | |
|---|---|---|
| 1–8APart A | Name, address, PAN/Aadhaar, GST and other indirect tax registrations, status, previous year, assessment year, clause of section 44AB, and whether a concessional regime (115BA/115BAA/115BAB/115BAC/115BAD/115BAE) is opted | |
| 9Part B | Firm / AOP: partners and profit-sharing ratios, and any change during the year | |
| 10Part B | Nature of every business or profession, and any change | |
| 11Part B | Books prescribed under section 44AA, books maintained (with addresses and computer system), and books examined | |
| 12Part B | Presumptive income included in the P&L (44AD, 44ADA, 44AE, 44AF, 44B, 44BB, 44BBA, 44BBB, 44BBC, Chapter XII-G, First Schedule) | |
| 13Part B | Method of accounting, any change and its effect; ICDS adjustments and disclosures | |
| 14Part B | Method of valuing closing stock, and deviation from section 145A | |
| 15Part B | Capital asset converted into stock-in-trade | |
| 16Part B | Amounts not credited to P&L — section 28 items, pro-forma credits, drawbacks and refunds, escalation claims, other income, capital receipts | |
| 17Part B | Land or building transferred below stamp duty value (sections 43CA, 50C, 56(2)(x)) | |
| 18Part B | Depreciation block-wise — rate, opening WDV, adjustments, additions with dates put to use, depreciation and closing WDV | |
| 19Part B | Deductions admissible under sections 33AB, 33ABA, 35, 35ABA, 35ABB, 35AD, 35CCA, 35CCC, 35CCD, 35D, 35DD, 35DDA, 35E | |
| 20Part B | Bonus or commission paid instead of profit or dividend; employees’ PF/ESI contributions — due date and actual date of payment | |
| 21Part B | Capital, personal, political advertisement and club expenditure; penalties and fines, offences, compounding; 40(a), 40(b)/(ba), 40A(3)/(3A), 40A(7), 40A(9), contingent liabilities, 14A, proviso to 36(1)(iii) | |
| 22Part B | MSMED Act: interest inadmissible under section 23; amount payable to micro and small enterprises, paid within and beyond the time in section 15 | |
| 23Part B | Payments to related persons under section 40A(2)(b) | |
| 24Part B | Amounts deemed as profits under sections 33AB, 33ABA, 33AC | |
| 25Part B | Profit chargeable under section 41 | |
| 26Part B | Section 43B sums — pre-existing and incurred during the year, paid or unpaid by the due date (including 43B(h) for MSE dues) | |
| 27Part B | CENVAT credit and its treatment; prior-period income and expenditure | |
| 29A–29BPart B | Income from other sources under section 56(2)(ix) and 56(2)(x) | |
| 30Part B | Hundi borrowings repaid otherwise than by account payee cheque (section 69D) | |
| 30A–30CPart B | Transfer pricing primary adjustment (92CE), interest limitation (94B), impermissible avoidance arrangement (96) | |
| 31Part B | Loans, deposits and specified sums taken (269SS), cash receipts and payments (269ST), and repayments (269T) — with nature codes | |
| 32Part B | Brought forward losses and depreciation; change in shareholding (79); speculation loss (73, 73A) | |
| 33Part B | Chapter VI-A and section 10A/10AA deductions | |
| 34Part B | TDS/TCS compliance — amounts, short or non-deduction, statements filed, and interest under 201(1A)/206C(7) | |
| 35Part B | Quantitative details — traded goods; raw materials, finished goods and by-products | |
| 36A–36BPart B | Deemed dividend under 2(22)(e); amount received on buy-back of shares under 2(22)(f) | |
| 37–39Part B | Cost audit, Central Excise audit and service tax valuation audit — disqualifications or disagreements | |
| 40Part B | Turnover, gross profit, net profit, stock and yield ratios — this year and the previous year | |
| 41Part B | Demands raised and refunds issued under other tax laws | |
| 42Part B | Statements in Form 61, 61A or 61B | |
| 43Part B | Country-by-country report under section 286 | |
| 44Part B | Break-up of total expenditure — GST registered, composition, exempt and unregistered entities |
Clauses as in Form 3CD amended by the Income-tax (Eighth Amendment) Rules, 2025, w.e.f. 1 April 2025 — clauses 28, 29 and 36 are omitted, and clause 36B (buy-back) is added. Form 3CD is for audits under the Income-tax Act, 1961; from tax year 2026-27 the audit report under the Income-tax Act, 2025 is in the form prescribed by the Income-tax Rules, 2026.
CARO 2020 · paragraph 3
Companies (Auditor’s Report) Order, 2020
| Clause | What to report and check | |
|---|---|---|
| 3(i) | Property, plant and equipment and intangibles — records, physical verification, title deeds of immovable property, revaluation, benami proceedings | |
| 3(ii) | Inventory — physical verification and discrepancies of 10% or more; working capital limits above ₹5 crore and quarterly returns matching the books | |
| 3(iii) | Loans, advances, guarantees, security and investments — amounts, terms, regular repayment, overdue over 90 days, renewals, loans repayable on demand | |
| 3(iv) | Compliance with sections 185 and 186 | |
| 3(v) | Deposits and deemed deposits — RBI directions, sections 73 to 76, orders of NCLT, RBI or courts | |
| 3(vi) | Cost records under section 148(1) | |
| 3(vii) | Statutory dues — regular deposit, arrears over six months; disputed dues with the forum | |
| 3(viii) | Income surrendered or disclosed in tax assessments and not recorded in the books | |
| 3(ix) | Borrowings — defaults, wilful defaulter, use of term loans, short-term funds for long-term use, funds for subsidiaries, loans against pledged securities | |
| 3(x) | IPO / FPO / debt proceeds; preferential allotment and private placement (sections 42 and 62) | |
| 3(xi) | Fraud by or on the company; ADT-4 under section 143(12); whistle-blower complaints | |
| 3(xii) | Nidhi companies — net owned funds to deposits ratio, unencumbered term deposits, defaults | |
| 3(xiii) | Related party transactions — sections 177 and 188, and disclosure | |
| 3(xiv) | Internal audit system and reports of internal auditors | |
| 3(xv) | Non-cash transactions with directors or connected persons (section 192) | |
| 3(xvi) | RBI registration (45-IA), non-banking activity without registration, core investment companies | |
| 3(xvii) | Cash losses in the year and the previous year | |
| 3(xviii) | Resignation of the statutory auditor and the outgoing auditor’s concerns | |
| 3(xix) | Material uncertainty about meeting liabilities due within one year | |
| 3(xx) | Unspent CSR — transfer to a Schedule VII fund within six months, or to the unspent CSR account (section 135) | |
| 3(xxi) | Qualifications or adverse remarks in CARO reports of companies in the consolidated financial statements |
For consolidated financial statements only clause 3(xxi) applies. Where an answer is unfavourable or qualified, the report must give the reasons (paragraph 4).
Where CARO 2020 does not apply: banking companies, insurance companies, section 8 companies, One Person Companies, small companies (paid-up capital up to ₹10 crore and turnover up to ₹100 crore, from 1 December 2025), and a private company that is not a holding or subsidiary of a public company, with paid-up capital plus reserves up to ₹1 crore, borrowings from banks or financial institutions not more than ₹1 crore at any time in the year, and total revenue up to ₹10 crore.
Sources
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