Under Section 44AB of the Income Tax Act, certain taxpayers (businesses, professionals) must get their accounts audited by a Chartered Accountant, and submit a tax audit report along with their ITR. The audit ensures accuracy, compliance with tax laws, and correct disclosures.
Audit Thresholds for AY 2025-26
For the assessment year 2025-26 (i.e. income earned in FY 2024-25):
| Category | Threshold / Limit | When audit is required |
| Business (normal) | Turnover > ₹ 1 crore | Audit is mandatory |
| Professionals | Gross receipts > ₹ 50 lakh | Audit is mandatory |
| Business under Presumptive Scheme (Section 44AD) | Turnover up to ₹ 2 crore (if presumptive scheme continues) | Audit may not be required if you stay within presumptive rules |
| Digital-transaction incentive | If a business has 95%+ transactions digital, higher threshold may apply (up to ₹ 10 crore) | Some sources indicate this "digital business" limit is applicable |
Due Dates & Recent Extension
- The statutory due date to submit the tax audit report (Form 3CA/3CB + 3CD) is 30 September 2025 for most taxpayers.
- However, the CBDT has recently extended this deadline to 31 October 2025 (for FY 2024-25 / AY 2025-26) for eligible assessees.
- The ITR filing due date for those needing audit becomes 31 October 2025 (unless further extended)
Penalties, Other Rules & Changes
- Penalty under Section 271B: If you were required to get a tax audit but didn't, or if you delay, the penalty is 0.5% of turnover or gross receipts, subject to a maximum of ₹ 1,50,000.
- If there's a reasonable cause for delay or non-compliance, penalty may be avoided.
- Changes in the Form 3CD (the detailed audit schedule) have been introduced for AY 2025-26.
FAQs
What is the tax audit limit for businesses in AY 2025-26?
For businesses, a tax audit is mandatory if turnover exceeds ₹1 crore. However, if at least 95% of transactions are digital, the audit threshold increases to ₹10 crore.
What is the tax audit limit for professionals in AY 2025-26?
For professionals such as doctors, lawyers, architects, CAs, etc., a tax audit is required if gross receipts exceed ₹50 lakh.
Is a tax audit required for the presumptive taxation scheme (Section 44AD/44ADA)?
Under 44AD (business): If turnover ≤ ₹2 crore and you declare income at least 6%/8% of turnover, no audit is required.Under 44ADA (professionals): If receipts ≤ ₹50 lakh and you declare 50% or more as income, no audit is required.
If income is declared below the prescribed percentage, a tax audit becomes mandatory.
What is the due date for filing the tax audit report for AY 2025-26?
The due date has been extended by CBDT to 31 October 2025 for tax audit cases.
What is the penalty for not conducting a tax audit?
If you fail to get accounts audited when required, penalty under Section 271B is 0.5% of turnover/gross receipts, subject to a maximum of ₹1,50,000.
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