Section 271B Tax Audit Penalty: Section 44AB Checklist
Section 271B 0.5% turnover penalty when Form 3CD audit is late — 44AB thresholds for returning consultants.
The 60-second version
Section 271B imposes penalty when assessee fails to get accounts audited under Section 44AB by due date — returning NRIs with consultancy turnover above INR 1 crore cash or INR 10 crore digital must file Form 3CA/3CB before ITR due date.
271B is 0.5% of turnover or INR 1.5 lakh — audit report must upload before belated ITR if threshold crossed
Section 271B penalty applies when tax audit under Section 44AB is not completed by due date — returning NRIs running India consultancy from prior NRI freelance must audit once turnover crosses threshold.
Minimum penalty INR 1.5 lakh or 0.5% of turnover whichever is lower — reasonable cause under Section 273B may reduce penalty with documented compliance effort.
Books lane: Section 271G guide for books maintenance before audit.
271B vs related
| Section | Trigger | Penalty |
|---|---|---|
| 271B | No audit report | 0.5% turnover |
| 271G | No books | INR 25,000 |
| 44AB | Threshold crossed | Audit mandatory |
| 234F | Late ITR | Flat fee |
Audit compliance
Threshold check
Turnover FY.
Appoint CA
Before year-end.
Form 3CD
Audit report.
Upload
Before ITR.
ITR-3/5
With audit clause.
Flow
271B kit
- Books of account.
- GST returns.
- Bank stmt.
- Form 3CD.
- CA UDIN.
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Digital threshold
INR 10 crore digital turnover threshold applies from FY 2023-24 — cash-heavy business still uses INR 1 crore limit.
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vs 271G?
271G penalizes missing books; 271B penalizes missing audit report when 44AB applies.
Freelancer?
Consultancy on ITR-3 crosses audit threshold — not eligible for 44AD if not eligible business.
44AD escape?
Presumptive 44AD taxpayers skip audit below INR 2 crore — verify digital receipt threshold.
Belated?
Audit report must precede belated ITR — late audit still attracts 271B for delay period.
273B?
Document genuine attempt to appoint CA before due date for 273B reasonable cause.
NRI year?
Audit applies to FY where you were resident with India business income — prior NRI years separate.
Your tax year is already running.
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