The Institute of Chartered Accountants of India (ICAI) has notified new guidelines titled "The Chartered Accountants (Limit on Number of Tax Audits) Guidelines, 2025", aimed at regulating the number of tax audit assignments a Chartered Accountant (CA) can undertake in a financial year. These guidelines will come into effect from April 1, 2026, replacing the existing framework under the Council General Guidelines, 2008.
Invoking powers under Section 15(2)(fa) of the Chartered Accountants Act, 1949, the Council has specified that a CA in practice or a proprietary firm can undertake a maximum of 60 tax audit assignments in a financial year, whether for corporate or non-corporate assessees. In the case of CA firms, the cap is 60 assignments per partner.
The guidelines clarify several scenarios:
- Partner Overlap: If a CA is a partner in multiple firms, the total limit of 60 will apply in aggregate across all firms.
- Individual + Firm Assignments: Assignments taken individually by a partner will count toward the same 60-limit tally.
- Exemptions: Audits under Sections 44AE, 44ADA, and 44AD of the Income-tax Act, 1961 are excluded from the audit count.
- Revised Reports: Revisions of audit reports won't be included in the audit count.
- Branch Audits: Audits of branch and head offices of the same entity will be treated as one single assignment.
Importantly, part-time practicing partners will not be counted while determining a firm's capacity for tax audits.
To enhance transparency and compliance, CAs will now be required to maintain proper records of tax audit assignments in a format prescribed by the ICAI Council.
The updated guidelines supersede earlier norms and aim to ensure audit quality, reduce concentration of audits among few professionals, and encourage wider distribution of assignments across the profession. The Council also retains the power to issue further clarifications to address any difficulties in implementation.
These changes are expected to significantly impact audit planning for Chartered Accountants and their firms, especially as the 2026-27 financial year approaches.
Official copy of the notification is as follows
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
NOTIFICATION
New Delhi, the 25th July, 2025
F. No. 1-CA(7)/234/2025.-In exercise of the powers conferred by Section 15(2)(fa) of the Chartered Accountants Act, 1949 (38 of 1949), the Council of the Institute of Chartered Accountants of India hereby makes the following guidelines:
Short title and commencement
1. These guidelines may be called The Chartered Accountants (Limit on Number of Tax Audits) Guidelines, 2025.
2. They shall come into force w.e.f. 01.04.2026 onwards.
3. These Guidelines are issued in respect of the limit on the number of tax audit assignments under Section 44AB of the Income-tax Act, 1961.
Definitions
4. For the purpose of these Guidelines:
(a) 'Act' means the Chartered Accountants Act, 1949.
(b) "Chartered Accountant in practice" means a person who is a member of the Institute and holds a valid Certificate of Practice issued under Section 6 of the Act.
(c) "Council" means the Council of the Institute constituted under Section 9 of the Act.
(d) "Institute" means the Institute of Chartered Accountants of India constituted under the Act.
5. All other words and expressions used but not defined herein have the same meaning as assigned to them under the Chartered Accountants Act, 1949 and the Rules, Regulations made thereunder.
6. A Chartered Accountant in practice shall not accept and sign, in a financial year, more than the "specified number of tax audit assignments" in terms of these Guidelines.
Explanation - In case acceptance and signing of the audit assignments under these Guidelines are spread over in two different financial years, then, the financial year in which the report is signed will be considered for the "specified number of tax audit assignments".
7. In the case of a firm of Chartered Accountants in practice, the "specified number of tax audit assignments" shall be construed as the specified number of tax audit assignments for each partner of the firm.
8. Where any partner of the firm is also a partner of any other firm or firms of Chartered Accountants in practice, the number of tax audit assignments which may be taken for all the firms put together in relation to such partner shall not exceed the "specified number of tax audit assignments" in the aggregate.
9. Where any partner of a firm of Chartered Accountants in practice accepts one or more tax audit assignments in his individual capacity, the total number of such assignments which may be accepted and signed by him shall not exceed the "specified number of tax audit assignments" in the aggregate.
10. The tax audit assignments arising out of the requirements under clause (c), clause (d) and clause (e) of section 44AB, in relation to persons covered under section 44AE, 44ADA and 44AD, respectively, shall not be taken into account for the purpose of reckoning the "specified number of tax audit assignments" under these Guidelines.
11. In case of revision of tax audit report, the revised tax audit report shall not be taken into account for the purpose of calculating "the specified number of tax audit assignments".
12. Explanation:
For the above purpose, "the specified number of tax audit assignments" means -
(a) in the case of a Chartered Accountant in practice or a proprietary firm of Chartered Accountant, 60 tax audit assignments, in a financial year, whether in respect of corporate or non-corporate assesses.
(b) in the case of firm of Chartered Accountants in practice, 60 tax audit assignments per partner in the firm, in a financial year, whether in respect of corporate or non-corporate assesses.
12.1 In computing the "specified number of tax audit assignments", each financial year's audit would be taken as a separate assignment.
12.2 In computing the "specified number of tax audit assignments", the number of such assignments, which he or any partner of his firm has accepted, whether singly or in combination with any other Chartered Accountant in practice or firm of such Chartered Accountants, shall be taken into account.
12.3 The audit of the head office and branch offices of an entity shall be regarded as single tax audit assignment.
12.4 The audit of one or more branches of the same entity by one Chartered Accountant in practice shall be construed as only one tax audit assignment.
12.5 A Chartered Accountant being a part time practicing partner of a firm shall not be taken into account for the purpose of reckoning the tax audit assignments of the firm.
13. A Chartered Accountant in practice shall maintain a record of the tax audit assignments accepted and signed by him in each financial year in the format as may be provided by the Council.
These guidelines shall supercede all earlier guidelines on this subject with effect from 1.4.2026 onwards. Chapter VI of the Council General Guidelines, 2008 [Council Guidelines No.1-CA(7)/02/2008 dated 8th August, 2008] shall continue to be valid till 31.3.2026.
Power to remove difficulties
If any difficulty arises in giving effect to the provisions of these Guidelines, the Council may, by general or special order, issue clarification in the form of Circulars as may be necessary or expedient, which is not inconsistent with provisions of the Act, for the purpose of removing the difficulty.
(Dr.) JAI KUMAR BATRA, Secy.
[ADVT.-III/4/Exty./258/2025-26]
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