Statutory Audit

Two kinds of audit are required for private limited companies - statutory audit and income-tax audit. Statutory audit is required as per the Companies Act, and the income-tax audit is required as per the Income tax rules. The statutory auditor must be appointed within the first 30 days of forming the company. The income-tax audit is only required if the revenue exceeds a certain limit, e.g. Rs 40lakhs for an IT company and the income-tax auditor can be appointed after reaching the required revenue level.

Any practicing CA can do the statutory audit but must be different from the firm that does the accounting.

Bottom line - add the cost of statutory audit to your budget. It's not sufficient to just have one accountant. The additional audit costs could start anywhere from Rs 25000 per annum.