Tax Audit Assistant — User Guide
How to run a 44AB engagement end-to-end: what to export from Tally, how the four steps work, what each clause check needs, and how to connect Tally directly with the TaxCorp Tally Bridge.
Quick start (5 minutes)
- Open Tax Audit Assistant and fill in the assessee — name, PAN, AY, Form 3CA or 3CB — then press Save. This creates the engagement; everything you do is saved to it, per client per assessment year.
- Upload the client's Tally exports (Excel or XML — see the table below). The assistant recognizes each sheet automatically and shows you what it found.
- Step 2 → Run checks. Code — not AI — scans every voucher and lists exceptions clause by clause, with amounts.
- Step 3 → Draft everything. The AI drafts Form 3CA/3CB and all 44 clauses of Form 3CD, reporting the computed check figures in Guidance Note format. The engagement and management representation letters generate instantly (no AI, no tokens).
- Step 4 → download the assembled report as Word/PDF, the clause-wise Excel workpapers, the letters, and a structured JSON of the whole engagement.
What to export from Tally
Export each report from Tally to Excel and upload the files as-is — no reformatting needed. The assistant recognizes each sheet (including Tally's merged two-row Dr/Cr headers) and tells you what it understood.
| Export | Where in Tally | Enables |
|---|---|---|
| Trial Balance | Display → Trial Balance | 43B dues, turnover, clause 40 ratios, TDS-head scan, 21(a) scrutiny |
| Cash Book | Display → Account Books → Cash/Bank Book → Cash | All cash checks: 40A(3), 269SS, 269ST, 269T |
| Day Book | Display → Day Book | Voucher-level context for the other checks |
| PF/ESI challan register | Template available on the upload panel | 36(1)(va) — due date vs actual deposit, challan by challan |
| Creditor bills / MSME ageing | Template available on the upload panel | 43B(h) — MSME dues beyond 45 days |
| Fixed asset register | Template available on the upload panel | Clause 18 — block-wise depreciation u/s 32, 180-day test, s.50 |
| Turnover recon sheet | Template available on the upload panel (GSTR-1 / 3B / 26AS figures) | Books-vs-returns turnover reconciliation |
| Prior-year Trial Balance | Display → Trial Balance (previous FY) | Year-on-year ratios — tick the "prior-year" checkbox before uploading it |
PDF and Word files (signed financials, last year's 3CD) are also accepted — they are read as reference text for the drafting step rather than parsed as books.
Faster route — Tally XML
Instead of separate Excel reports, export straight from Tally as XML (Alt+E → XML) and upload the .xml files. XML is richer than Excel: ledger masters carry their parent group (so Sundry Creditors and Duties & Taxes are known, not guessed from names), vouchers carry every posting line, and bill references carry dates. One ledger XML plus one voucher XML replaces the Trial Balance, Cash Book and Day Book; a Bills XML replaces the creditor ageing (except MSME status, which Tally does not hold). Upload the ledger XML first — voucher files use its groups to tell cash and bank postings apart.
The four steps
1Client & books
Fill the assessee panel (name is the only required field to save) and import the books. The recognized-sheets table shows what each upload was classified as — Trial Balance, Cash Book, Day Book, PF/ESI register, creditor ageing, fixed asset register, recon sheet, or plain reference text — with row counts and any warnings. If a sheet was misread, check it matches the downloadable template headings, clear the imported books and re-upload.
2Clause checks
Press Run checks. Every figure is computed in code from the vouchers — the AI never invents a number. Each check card shows a status, a summary, the data it was based on, and an expandable exception table (date, party, reference, amount, remarks). Statuses:
- OK — scanned, nothing to report.
- Exceptions — items found; review them, they are candidates for reporting, not conclusions. Rule 6DD cover, MSME status and TDS deduction remain your judgment.
- Needs data — the books uploaded so far cannot answer this check; the message names the exact Tally export to bring.
Triaging the findings — AI review and your decisions
The scan is deliberately over-inclusive, so every finding carries a decision workflow:
- AI review (per check, or "AI review all") — the AI reads each item against the ICAI Guidance Note and suggests Report / Likely not / Vouch first, with a one-line reason. Suggestions are advisory and use your AI token quota.
- Your call — mark each item Report or Not reportable (with an optional remark), or accept the AI's clear suggestions in one click ("Apply AI suggestions to pending"; items the AI says to vouch stay pending on purpose).
- Auditor's note per check — a free-text note that flows into the draft and the workpaper index.
Your decisions drive everything downstream: items you mark Not reportable never enter the 3CD draft (they appear as a documented-consideration line instead), your remarks travel with the reported items, and the Excel workpapers record the AI suggestion, your decision and your remark per row — the audit trail the Guidance Note expects. Decisions survive check re-runs and are saved with the engagement.
When exceptions exist, Excel workpapers downloads one clause-wise workbook with the full exception lists — the on-screen tables cap at 200 rows, the workbook does not.
3Draft 3CA/3CB + 3CD
Draft everything produces the audit report and all 44 clauses in five clause groups, each grounded in the ICAI Guidance Note (Revised 2025) plus your computed check results — or draft/redraft one group at a time after a correction. The engagement letter (SA 210) and management representation letter (SA 580) generate instantly from the engagement data — no AI call, no tokens — and the MRL's representation points are driven by what the checks actually found.
Drafting uses your AI token quota (the meter at the top of the page). Premium subscribers can switch between TaxCorp Fast AI and TaxCorp Advanced AI for the drafting step.
4Assembled report
The full draft — report, 3CD clause groups, letters — assembled in order, with download buttons for every format (see Downloads).
The 12 clause checks
| Check | 3CD clause | Section | Needs |
|---|---|---|---|
| Cash payments above Rs.10,000/person/day (Rs.35,000 for transporters) | 21(d) | 40A(3)/(3A) | Cash Book |
| Cash receipts of Rs.2,00,000 or more | 31(bb)/(bc) | 269ST | Cash Book |
| Loans/deposits accepted in cash (Rs.20,000+) | 31(a)/(b) | 269SS | Cash Book |
| Loans/deposits repaid in cash (Rs.20,000+) | 31(c)/(d) | 269T | Cash Book |
| Employee PF/ESI — due date vs actual deposit | 20(b) | 36(1)(va) | PF/ESI challan register |
| Statutory dues outstanding at year-end | 26 | 43B | Trial Balance |
| MSME supplier dues beyond 45 days | 22 | 43B(h) | Creditor bills/ageing |
| Expense heads attracting TDS — candidates | 34 / 21(b) | Ch. XVII-B | Trial Balance |
| Ledgers indicating inadmissible expenditure | 21(a) | 37(1), 40, 40A | Trial Balance |
| Turnover, 44AB applicability & ratios (incl. 5% cash test) | 40 | 44AB | Trial Balance (+ prior-year TB for comparatives) |
| Depreciation — block of assets, 180-day test, s.50 | 18 | 32 r.w. Rule 5 | Fixed asset register |
| Turnover: books vs GSTR-1 / GSTR-3B / 26AS | 40 / 44AB | 44AB, 145 | Turnover recon sheet |
TaxCorp Tally Bridge — skip the export step
The bridge is a small Windows app that runs on the machine where TallyPrime is installed. It pulls the ledgers, vouchers and bills straight from Tally's gateway and pushes them into your engagement — no manual exports, and richer data than Excel (parent groups, every posting line, bill dates). Your Tally or TaxCorp password never leaves its machine.
One-time setup
- In TallyPrime: F1 → Settings → Connectivity → set "TallyPrime acts as: Both". The client's company must be open in Tally.
- Download the bridge from the engagement page (Windows, ~49 MB). It is unsigned during the pilot, so Windows SmartScreen will warn — click More info → Run anyway.
- On the engagement page, press Connect Tally — an 8-character code appears (single use, valid 10 minutes). Type it into the bridge and press Pair. Pairing is once per machine, not per engagement.
Each audit
In the bridge: pick the engagement, pick the company open in Tally, set the audit period, press Send to TaxCorp. A full year uploads in under a minute (sent month by month, compressed). Re-sending a month replaces it — nothing is double-counted.
Paired machines are listed on the engagement page and under Profile → Connected apps, where you can revoke any machine. "Forget this machine" inside the bridge only clears its local copy — revoke on the website to actually cut access.
Downloads & outputs
- Assembled report — Word or PDF: Form 3CA/3CB + all drafted 3CD clause groups in order.
- Excel workpapers — one workbook, one sheet per clause with the complete exception lists. Your audit-file evidence of what was scanned.
- Engagement letter / MRL — individual Word downloads.
- Structured JSON — the whole engagement (profile, books digest, check results, drafts) in a machine-readable interchange format. Note: this is not the income-tax e-filing utility's schema — figures still go into the department utility by hand.
Common questions
A check says "needs data" — is something wrong?
No — it means the books uploaded so far cannot answer that check, and the message names the exact Tally export to bring. Most common: the cash checks need the Cash Book ledger export (a condensed Day Book cannot show which side was cash).
Are the exceptions final disallowances?
No. The checks surface candidates with computed amounts; whether Rule 6DD covers a payment, whether a supplier is MSME-registered, or whether TDS was in fact deducted remains the auditor's call. The drafts present the figures in reporting format with a "points for the auditor" list per clause group.
My sheet was recognized as "Reference text"
The parser did not match its headings. Download the matching template from the upload panel, paste your data under its headings, and re-upload. For Tally reports, export from the exact menu path in the table above without editing the layout.
Does drafting cost tokens?
The AI drafting in step 3 does (the meter at the top shows usage). The checks, letters, workpapers and all downloads are computed in code and cost nothing.
Where did my earlier work go?
Everything lives on the engagement — pick it from the dropdown at the top. One engagement per client per AY; press Save after changes.
What about research, a clause explainer, or reviewing a 3CD I already drafted?
That is the companion page, Tax Audit Research — Guidance-Note Q&A with citations, a per-clause explainer (11–44), an audit checklist generator, and a clause-by-clause compliance review of an uploaded 3CD.