Tax Consultant
1871 Points
Posted on 12 August 2026
The previous responses correctly point to Section 139(2). Let me add the specific thresholds because they resolve your question directly:
WHEN MANDATORY ROTATION APPLIES
Section 139(2) read with Rule 5 of Companies (Audit and Auditors) Rules 2014 requires auditor rotation for: (a) Listed companies, OR (b) Unlisted companies meeting ANY ONE of: PAID-UP SHARE CAPITAL Rs 10 crore or more, OR BORROWINGS Rs 50 crore or more from banks or financial institutions, OR PUBLIC DEPOSITS Rs 25 crore or more.
TURNOVER IS NOT A CRITERION. The Rs 2 crore figure you mentioned is turnover, which is irrelevant for Section 139(2) rotation under any threshold.
FOR YOUR COMPANY
If your private limited company has paid-up share capital below Rs 10 crore, borrowings below Rs 50 crore, and public deposits below Rs 25 crore, MANDATORY ROTATION DOES NOT APPLY. The same auditor can continue into year 11 and beyond without any legal requirement to rotate.
WHAT STILL APPLIES TO ALL COMPANIES
Section 141 disqualification criteria apply regardless of size: auditor must not hold company securities, must not have business dealings with the company, must not be related to directors. These are independent of tenure. Verify these still hold before passing the reappointment resolution.
Reappointment process: board resolution, then member resolution at AGM, then file ADT-1 with ROC within 15 days of appointment.
For the full annual compliance checklist including ADT-1, GSTR-9, and MGT-7 timelines, see [MGT-7 annual return filing guide with deadlines](https://taxgarden.in/blog/mgt-7-annual-return-filing-step-by-step-mca-v3-portal-india-2026).