CARO 2020 Applicability Checker

Q: Which companies are directly excluded from CARO?

Banking companies, insurance companies, Section 8 companies, One Person Companies, and small companies are excluded from CARO reporting requirements directly, without needing to test any financial conditions.

Q: What conditions must a private company meet to be exempt from CARO?

All of: not being a subsidiary or holding company of a public company, paid-up capital and reserves not exceeding ₹1 crore, borrowings not exceeding ₹1 crore, and revenue not exceeding ₹10 crore — missing even one condition means the exemption doesn't apply.

Check CARO applicability

CARO applicability is assessed company-wise and must be documented in the audit-planning file.

CARO 2020

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Private-company exemption

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How This Is Calculated

CARO reporting doesn't apply to certain categories directly (banking, insurance, Section 8, OPC, small companies), and private companies get a separate exemption if they satisfy all of: not a subsidiary/holding of a public company, paid-up capital and reserves up to ₹1 crore, borrowings up to ₹1 crore, and revenue up to ₹10 crore — all conditions must be met together for the private-company exemption to apply.

Frequently Asked Questions

Which companies are directly excluded from CARO? ▼

What conditions must a private company meet to be exempt from CARO? ▼

Evidence and verification checklist

Confirm the current, in-force text governing CARO 2020 Applicability Checker on the official source linked above - the summary on this page is an implementation aid, not a substitute for it.
Record the exact event/transaction date, since the applicable version of the law, form or threshold can change between the date of the underlying event and today.
Preserve the primary documents (notices, applications, orders, acknowledgements) that would let a reviewer reconstruct how the facts were classified and what was actually done.
Check for a State-specific rule, later amendment or binding judicial decision that may modify how this applies on your facts.

Before relying on this page

This page is a structured implementation summary, not the operative legal text. Portal or process acceptance of a filing does not by itself establish legal compliance - the underlying classification, authority, evidence and timeline still have to be independently correct. Where the facts are contested, high-value, or time-barred if delayed, verify the current position with the official source and, where appropriate, a qualified professional before acting.

Methodology, assumptions and sources

Scope: Checks CARO 2020 (Companies (Auditor's Report) Order, 2020) applicability for a company's statutory audit, based on company type and size/exemption criteria.

Calculation logic

CARO 2020 applies to every company, including a foreign company, EXCEPT specifically exempted categories: banking companies, insurance companies, Section 8 (not-for-profit) companies, and a private limited company meeting ALL of a specific combination of small-size conditions (paid-up capital + reserves not exceeding ₹1 crore, total borrowings from banks/financial institutions not exceeding ₹1 crore at any point during the year, total revenue not exceeding ₹10 crore, and not being a holding/subsidiary of a public company).

For a private company, ALL the small-size exemption conditions must be met simultaneously for CARO to be inapplicable — if even one condition is exceeded, CARO applies in full.

Where CARO applies, the auditor's report must include the specific matters prescribed under the Order (fixed assets, inventory, related-party transactions, loans, deposits, statutory dues, etc., as listed in CARO 2020's clauses).

Inputs and assumptions

The private-company exemption conditions (capital+reserves, borrowings, revenue thresholds, and non-holding/subsidiary status) follow the current CARO 2020 provisions — all conditions must be satisfied together, which the checker enforces as an AND condition.

'At any point during the year' for the borrowings threshold means the peak figure during the year is used, not just the year-end figure, consistent with how similar peak-value tests are applied elsewhere in company-law thresholds.

Exclusions and edge cases

Does not itself generate the CARO report content — this checker addresses applicability only; the specific reporting under each CARO clause is a matter for the statutory auditor's professional judgment and audit procedures.

A public company (regardless of size) is never exempt from CARO — only private companies can qualify for the small-size exemption, which the checker applies based on the company type selected.

Sources

Review status: reviewed and approved by CA Nikhil Gupta on 17 July 2026.