Tax Audit Mandatory or Optional

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This discussion clarifies whether a tax audit is mandatory for the current assessment year (AY 2026-27). If you previously opted for Section 44AD but conducted a tax audit in AY 2025-26, you are generally locked out of 44AD for AY 2026-27 and must file under ITR-3 with an audit. However, if you haven't used 44AD in the three years prior to AY 2025-26, you may be able to use 44AD for AY 2026-27, provided your profit margin meets the specified thresholds for digital and cash sales.

Asif Ali

Asif Ali (Querist)

23 August 2026 Dear Sir,
Last A.Y. 2025-26 maine tax audit karaya tha turnover 1 crore 70 lakh tha jab net income 7 lakh tak tax liability exempt thi aur NP ration 4.05 tha. Lekin is current A.Y. 2026-27 mein turnover 1 crore 56 lakh hai aur aur income 12 lakh tak tax liability nil hai....
Mera question yeh hai ki last year audit karaya tha itr3 file hui to kya is baar 44ad mein itr file kar sakte hain kya NP ratio 6.65 ke sath.?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

23 August 2026 If you claimed Section 44AD in earlier years and broke the chain in AY 2025-26, you are locked out of Section 44AD for AY 2026-27 and must file ITR-3 with a Tax Audit. However, if you never opted into 44AD prior to AY 2025-26, you can freely choose 44AD for AY 2026-27 and file ITR-4 without an audit, provided your 6.65% profit covers at least 6% on digital sales and 8% on cash sales.

Asif Ali

Asif Ali (Querist)

24 August 2026 A.Y. 2025-26 se 3 assessment year pehle itr4 44ad mein hi file kiya karta tha....lekin 2025-26 mein tax audit karaya tha..is baar confused hu 44ad mein file karna chahta hu..confused hu