A management representation letter format for the tax audit under section 44AB – the Guidance Note (Revised 2025) subjects, clause by clause. Books and locations, the accounting method, stock valuation and section 145A, loans and repayments under 269SS and 269T, cash payments under 40A(3), the section 43B position including the 43B(h) MSME payment status, TDS and clause 34, ICDS, related-party payments, contingent liabilities – and the representation that anchors the whole file: the Form 3CD particulars prepared by the assessee are complete, true and correct. It ends with the undertaking to accept the uploaded report on the e-filing portal.
MRL format for tax audit u/s 44AB (AY 2026-27)
[Entity address]
The Partner,
[Auditor firm name]
Chartered Accountants
[Firm address]
Dear Sirs,
This letter is provided in connection with your examination and report under section 44AB of the Income-tax Act, 1961 in respect of [Entity name] for the previous year [FY] relevant to assessment year [AY]. We confirm the following to the best of our knowledge and belief, having made the inquiries we considered necessary:
- Regular books of account have been maintained for the business, and the complete list of books and the locations at which they are kept has been furnished to you.
- The method of accounting followed during the year is the same as in the immediately preceding year, and there has been no change requiring disclosure – or, where changed, the change and its effect have been disclosed to you.
- Closing stock has been valued consistently at the lower of cost and net realisable value, and the adjustments required by section 145A (inclusive method) have been made in the computation furnished to you.
- The statement of particulars in Form 3CD has been prepared and compiled by us; the particulars stated in it are complete, true and correct, and the supporting workings for each clause have been made available to you.
- All loans, deposits and specified sums taken or accepted, and all repayments made, were through the modes prescribed in sections 269SS and 269T; squared-up loan and deposit accounts during the year have been disclosed to you.
- No amount of two lakh rupees or more has been received otherwise than through the modes prescribed in section 269ST.
- Payments exceeding the limits in section 40A(3) were made by account-payee cheque, bank draft or electronic modes, except as disclosed to you.
- The status of every liability covered by section 43B – including tax, duty, cess, employer contributions, interest to specified lenders and leave encashment – and the dates of payment have been correctly furnished; suppliers registered under the MSMED Act, 2006 have been identified, and the amounts paid and payable to them within and beyond the time allowed by section 15 of that Act have been correctly stated for the purposes of section 43B(h) and clause 22 of Form 3CD.
- Tax has been deducted and collected at source wherever applicable, deposited within the due dates except as disclosed, and the particulars furnished for clause 34 are complete.
- The Income Computation and Disclosure Standards have been complied with, and the adjustments and disclosures required by them are reflected in the particulars furnished.
- Personal expenses have not been charged to the business, except to the extent separately disclosed.
- Expenditure has been classified between capital and revenue on a consistent basis, and items debited to the profit and loss account that are capital, personal or otherwise inadmissible have been disclosed to you.
- Payments to persons specified in section 40A(2)(b) have been fully disclosed.
- All contingent liabilities, and all claims against the entity not acknowledged as debts, have been disclosed.
- Amounts chargeable under section 41 – including remissions, cessations and recoveries of amounts earlier allowed – have been identified and disclosed.
- All GST registrations of the entity have been disclosed, and the reconciliation of turnover per the books with the GST returns has been provided to you.
- The applicability of the presumptive taxation provisions has been considered, and the facts relevant to that assessment have been furnished correctly.
- There is no undisclosed income or expenditure of the business, and no transactions have been omitted from the books of account.
- We undertake to accept the report on the e-filing portal within the statutory time after you upload it.
This letter is provided in support of your report dated [date of the audit report] and covers all the periods dealt with in that report.
For [Entity name]
([Signatory name])
[Designation]
What the tax audit MRL pins down
| Subject | The representation |
|---|---|
| Form 3CD ownership | The statement of particulars was prepared and compiled by the assessee, and the particulars are complete, true and correct – the auditor examines, the assessee owns |
| Books and method | Regular books maintained, locations disclosed, accounting method consistent with the prior year, stock valued at lower of cost and NRV with 145A adjustments made |
| Cash and loan discipline | Sections 269SS and 269T modes for loans and repayments, squared-up accounts disclosed, no receipts of two lakh or more outside 269ST modes, 40A(3) payments through banking channels |
| Section 43B and MSME | Payment status of every 43B liability with dates – and the 43B(h) position: MSMED suppliers identified and amounts paid within or beyond the section 15 window correctly stated |
| TDS, ICDS and disclosures | TDS deducted and deposited with clause 34 particulars complete, ICDS compliance reflected, 40A(2)(b) payments and contingent liabilities disclosed |
| E-filing undertaking | The assessee will accept the report on the portal within the statutory time after the auditor uploads it |
FAQs
Is an MRL mandatory for a tax audit?
The Guidance Note expects the tax auditor to obtain written representations on the particulars before signing – and SA 580 principles apply to the extent relevant. Practically: no experienced tax auditor signs Form 3CB or reports on Form 3CD without this letter in the file.
Who signs the tax audit MRL?
The person who owns the particulars: the proprietor, a partner authorised by the firm, or the MD/CFO in a company. The generator lets you set one or two signatories with designations.
When should it be dated?
On or immediately before the date of the tax audit report – never after. The representations support the report, so they must exist when the report is signed; the generator warns you if the dates run the wrong way.
Why is the 43B(h) representation so prominent?
Because the auditor cannot independently identify which suppliers are MSMED-registered – that knowledge sits with the assessee. The representation makes the assessee’s identification and the payment-status data an explicit, signed position.
What are squared-up loans and why are they here?
Loans or deposits taken and repaid within the same year – they vanish from the closing balance sheet but still belong in the 269SS/269T reporting. The representation confirms they have been disclosed.
Does this letter cover GST?
It confirms the GST registrations were disclosed and the books-to-returns turnover reconciliation was provided – the inputs for the GST-linked clauses of Form 3CD. A GSTR-9/9C engagement needs its own letter, in the engagement letter generator.
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.