Tax Health Check Services

Q: What is a tax health check and how is it different from a tax audit?

A tax health check is a voluntary advisory review identifying compliance gaps, risks, and opportunities across income tax, TDS, and GST. Unlike a statutory tax audit (Section 44AB), it does not result in a formal audit opinion and can be conducted at any time and scope.

Q: What is the Annual Information Statement (AIS) and why does it matter for a tax health check?

AIS is the income tax department's comprehensive record of all financial transactions reported about a taxpayer — interest, dividend, securities, real estate, foreign remittances. A tax health check reviews AIS against filed returns to identify discrepancies before they trigger notices.

Q: How far back can a tax health check cover?

Any period, but most valuable for the last two to six open assessment years. Revised returns can be filed for the immediately preceding year. The health check identifies which years remain open and what risks are still live.

Q: When should a business conduct a tax health check?

Before fundraising, M&A, or acquisition; after significant business changes; on receiving the first tax or GST notice; after a change in finance team or CA; or as an annual preventive exercise before tax filing season.

Q: Can errors found in a tax health check be corrected without penalties?

In many cases yes. Recent errors can be corrected via revised return under Section 139(5) before 31 December with no correction penalty. For older years, voluntary disclosure before a notice is issued is always preferable to responding after departmental identification.

Independent Review of Your Tax Compliance Position — Identify Risks, Errors, and Savings Before They Become Problems

A tax health check is a structured, independent review of a taxpayer's income tax, GST, and TDS compliance position to identify errors in past filings, unrecognised tax risks, missed deductions, and outstanding obligations. It functions as a diagnostic exercise — not an audit — and provides management or individual taxpayers with a clear picture of their tax exposure before it attracts regulatory attention.

Whether you are an individual concerned about notices, a business preparing for a transaction, or a company that has recently undergone restructuring, a tax health check provides the visibility needed to act proactively. This service connects with our ITR preparation, business tax filing, and income tax e-filing overview services for end-to-end tax compliance support.

Our Tax Health Check Services

Income Tax Compliance Review

Reviewing past income tax returns for accuracy, correct form selection, completeness of income disclosure, and consistency with Form 26AS, AIS, and TIS — identifying any gaps or errors requiring correction.

TDS Compliance Review

Reviewing TDS deduction, deposit, and return filing compliance — identifying late deductions, incorrect rates, shortfall in deposits, and interest or penalties already accrued or likely to be levied.

GST Compliance Diagnostic

Reviewing GST return filings, GSTR reconciliation position, ITC eligibility, classification correctness, and e-invoice compliance — identifying mismatches before they trigger departmental scrutiny.

Deduction & Exemption Optimisation

Reviewing deductions and exemptions claimed in past returns to identify missed opportunities — including under-claimed Section 80C/80D investments, overlooked HRA exemption, and unclaimed capital loss carry-forwards.

Notice Risk Assessment

Assessing the likelihood of receiving income tax notices based on AIS mismatches, high-value transactions, GSTR reconciliation gaps, and the taxpayer's historical filing pattern.

Corrective Action Report

Delivering a prioritised corrective action report identifying errors, risks, and opportunities — with specific recommendations for revised returns, voluntary disclosures, or compliance improvements.

Benefits of a Proactive Tax Health Check

Identifies errors in past returns before the income tax department does — enabling proactive correction
Uncovers missed deductions and unclaimed credits that can reduce tax liability or generate refunds
Assesses the risk of scrutiny notices based on current filing position and AIS data
Provides lenders, investors, and acquirers with comfort on the target's tax compliance position
Supports board and management decision-making with a clear view of contingent tax liabilities
Reduces the cost of dealing with tax issues reactively — after notices or assessments are issued

Frequently Asked Questions

What is a tax health check and how is it different from a tax audit?

A tax health check is a voluntary, advisory review conducted to identify compliance gaps, risks, and opportunities across a taxpayer's income tax, TDS, and GST position. It is not a statutory audit and does not result in a formal audit opinion. A tax audit under Section 44AB is a mandatory statutory exercise for specified taxpayers resulting in Form 3CA/3CB and Form 3CD. A tax health check can be conducted at any time and at any scale — from a quick review of one year's ITR to a comprehensive multi-year, multi-tax diagnostic.

What is the Annual Information Statement (AIS) and why does it matter for a tax health check?

The Annual Information Statement (AIS) is a comprehensive record maintained by the income tax department showing all financial transactions reported about a taxpayer — including interest income, dividend, mutual fund transactions, securities transactions, real estate purchases, and foreign remittances. It is the department's primary tool for identifying under-reporting of income. A tax health check reviews the AIS against filed returns to identify discrepancies that may trigger notices, allowing the taxpayer to file revised returns or provide explanations proactively.

How far back can a tax health check cover?

A tax health check can cover any period, but from a practical standpoint it is most valuable to review the open assessment years — typically the last two to six financial years depending on the category of taxpayer. Revised returns can be filed for the immediately preceding assessment year. For earlier years, voluntary disclosures or responses to potential notices are the relevant corrective actions. The health check identifies which years are still open and what risks remain live.

When should a business conduct a tax health check?

Key triggers include: before a fundraising, merger, or acquisition (where tax due diligence will be conducted by the counterparty); after a significant business change such as a new product line, export activity, or related-party transactions; when the business receives its first income tax or GST notice; when there has been a change in the finance team or CA and historical compliance needs to be validated; or simply as an annual preventive exercise before the tax filing season.

Can errors found in a tax health check be corrected without penalties?

In many cases, yes. Errors in recent years can be corrected by filing a revised return under Section 139(5) before 31 December of the assessment year — with no penalty for the correction itself. For older years where revised returns cannot be filed, voluntary disclosure to the assessing officer or responding proactively to AIS feedback can mitigate penalties. Proactive correction before a notice is issued is always preferable to responding after the department has already identified the error.

Know Your Tax Risk Before the Department Does

Independent tax health check — errors identified, deductions recovered, risks mitigated.