⚖️ Audit & Entity Desk — AY 2026-27
The three questions every practice answers weekly: audit or not, how much can partners draw, which company regime.
1 · Tax audit u/s 44AB — required?
No tax audit required on these facts
- • Between ₹1cr and ₹10cr with ≤5% cash both ways — the enhanced limit saves you from 44AB(a).
2 · Partnership — s.40(b) remuneration ceiling
Max deductible remuneration
₹7,80,000
Firm tax if fully drawn (30% + cess)
₹68,640
- • s.40(b)(v): on the first ₹6,00,000 of book profit (or loss) — higher of ₹3,00,000 or 90%; on the balance — 60%.
- • Only remuneration to WORKING partners, authorised by the deed, is deductible; interest to partners capped at 12% simple p.a.
- • From FY 2025-26 the firm must deduct TDS u/s 194T at 10% on partner remuneration/interest above ₹20,000.
3 · Company — which regime?
115BAA (flat 22%) ✓ lowest25.17% → ₹25,16,800
No exemptions/incentives; no MAT; open to every domestic company.
Normal (25% + MAT applies) 26% → ₹26,00,000
Keeps exemptions/incentives + MAT credit; surcharge 7%/12% above ₹1cr/₹10cr.
Signed audit reports (3CA/3CB-3CD) and company returns remain professional engagements — this desk gives you the applicability call and the numbers in seconds. Running the partners' personal returns? That's the workspace + Client Workbook.