A copyable engagement letter format for the tax audit under section 44AB – drafted to the Guidance Note on Tax Audit (Revised 2025). The version below is the Form 3CB case (where the tax auditor also audits the accounts); the generator switches it to Form 3CA in one click for entities audited under other law. The paragraph that earns its keep: Form 3CD is prepared and compiled by the assessee – the auditor examines and reports whether the particulars are true and correct. Put that in writing before the season starts.
Tax audit engagement letter format u/s 44AB (AY 2026-27)
Chartered Accountants
[Firm address]
[The Board of Directors]
[Client name]
[Client address]
Dear Sirs,
We thank you for appointing us to conduct the tax audit of [Client name] under section 44AB of the Income-tax Act, 1961 for the previous year relevant to assessment year [AY]. This letter records the terms of the engagement.
We will audit the financial statements of the business and examine the statement of particulars required to be furnished in Form 3CD, and report in Form 3CB whether the financial statements give a true and fair view and whether the particulars in Form 3CD are, in our opinion, true and correct.
The engagement will be carried out in accordance with the Standards on Auditing to the extent applicable and the Guidance Note on Tax Audit under section 44AB issued by the Institute of Chartered Accountants of India (Revised 2025). Our report will carry a Unique Document Identification Number, and the engagement particulars will be shared with the Institute for that purpose.
- the preparation and compilation of the statement of particulars in Form 3CD, which is your responsibility – our role is to examine and report on those particulars, not to prepare them
- maintenance of the books of account and supporting records, including accounting software with an audit trail where the entity is a company
- identification of suppliers registered under the MSMED Act, 2006 and of the payment status of their dues for the purposes of section 43B(h) and clause 22 of Form 3CD
- making available the GST returns and registrations, Form 26AS and AIS data, loan and deposit registers, TDS records and all other information required for the clauses of Form 3CD
- written representations on the completeness and correctness of the particulars furnished, which we will request before signing
- acceptance of the report on the e-filing portal after we upload it, within the statutory time
Our fees for the engagement are [fee terms], plus applicable taxes and out-of-pocket expenses. Our working papers remain our property. This engagement covers the assessment year stated above only; a fresh appointment will be required for later years. Kindly confirm your agreement by signing and returning the enclosed copy of this letter.
For [Firm name]
Chartered Accountants
Firm Registration No.: [FRN]
([Partner name])
Partner
Membership No.: [M. No.]
Signature: ______________________ Name: ______________________
Designation: __________________ Date: ______________________
The 3CA / 3CB decision and what the letter fixes
| Point | Position |
|---|---|
| Form 3CB (this format) | Used where the accounts are not audited under any other law – the tax auditor audits the financial statements (true and fair) AND examines the Form 3CD particulars (true and correct) |
| Form 3CA (generator toggle) | Used where the accounts are already audited under other law (a company with a statutory audit) – the tax auditor examines the 3CD particulars and reports in Form 3CA |
| Who prepares Form 3CD | The assessee – preparation and compilation of the statement of particulars is management’s responsibility; the auditor verifies and reports on it |
| 43B(h) and MSME dues | Identifying MSMED-registered suppliers and the payment status of their dues is the assessee’s responsibility – the letter says so expressly |
| E-filing flow | The auditor uploads the report; the assessee must accept it on the portal within the statutory time – the letter records that undertaking |
| UDIN | The report carries a UDIN and engagement particulars are shared with ICAI when it is generated |
FAQs
When do I use Form 3CA instead of 3CB?
When the accounts of the business are audited under any other law – the classic case is a company whose statutory audit is done (by you or another firm). Then the tax auditor reports in Form 3CA on the already-audited accounts and examines the Form 3CD particulars. The generator switches the scope paragraph with the Report form toggle.
Who signs Form 3CD – the auditor or the assessee?
The assessee prepares and authenticates the particulars; the tax auditor reports whether they are true and correct. This engagement letter records that split expressly, which is the single most useful sentence in the file when a clause is questioned later.
Does one letter cover future years?
This format covers the stated assessment year only and says a fresh appointment is needed for later years – tax audit appointments are annual, unlike the recurring-terms position for statutory audit.
What does the letter say about 43B(h)?
That identifying suppliers registered under the MSMED Act, 2006 and the payment status of their dues – the inputs for section 43B(h) and clause 22 of Form 3CD – is the assessee’s responsibility. The auditor verifies what the assessee identifies.
Is the Revised 2025 Guidance Note the current anchor?
Yes – the Guidance Note on Tax Audit (Revised 2025) applies from AY 2025-26 onwards, and this letter cites it. An exposure draft proposing further revision was issued in July 2026; if it is finalised, the reference updates but the structure of the letter stands.
Is this the ICAI Appendix IX letter?
No – the Guidance Note carries a sample letter, but this wording is original and drafted independently to the same requirements, so nothing is reproduced from ICAI publications.
Method notes: this format is generated from the same drafting engine as the linked generator, against the standards and Council requirements as they stand in July 2026. All wording is original; nothing is reproduced from ICAI publications. Replace every highlighted placeholder, place the letter on the proper letterhead and have the signing person review each paragraph against the facts of the engagement. Reviewed by a practising CA; updated July 2026.