Under the Income Tax Act, certain taxpayers are mandated to have their accounts audited. This process involves a certified Chartered Accountant (CA) verifying the taxpayer's books of accounts and issuing a tax audit report in a prescribed format. The tax audit report contains details such as gross receipts, expenses, depreciation, and tax liability.
Who is Required to Get Accounts Audited?
The requirement for a tax audit primarily hinges on the turnover or gross receipts of a business or profession. Here's a breakdown of the criteria:
Businesses: A tax audit is mandatory if the total sales, turnover, or gross receipts exceed ₹1 crore in a financial year. However, an amendment under the Finance Act 2021 increased this threshold to ₹10 crore if cash transactions (receipts and payments) do not exceed 5% of the total transactions.
Professionals: For professionals, such as doctors, lawyers, and consultants, the audit is triggered if gross receipts exceed ₹50 lakh in a financial year.
Presumptive Taxation Scheme: Taxpayers who opt for the presumptive taxation scheme under Section 44AD, 44ADA or 44AE of the Income Tax Act may also be required to get their accounts audited under certain circumstances. This includes:
Due Dates for Filing ITR and Audit Reports
It's crucial to adhere to the deadlines for submitting the tax audit report and filing the Income Tax Return (ITR). Here are the relevant due dates for the Financial Year 2024-25 (Assessment Year 2025-26):
Tax Audit Report: The due date for furnishing the tax audit report (Forms 3CA/3CB and 3CD) is September 30, 2025.
ITR Filing (Audit Cases): For taxpayers whose accounts require an audit, the deadline for filing the ITR is October 31, 2025.
ITR Filing (Non-Audit Cases): For individuals and entities not requiring an audit, the ITR filing deadline is September 15, 2025. This was extended from the original date of July 31, 2025.
International Transactions: Taxpayers involved in international transactions or specified domestic transactions have a later deadline of November 30, 2025, for filing their ITR, with the audit report due by October 31, 2025.
Belated Returns: If the above deadlines are missed, a belated ITR can be filed until December 31, 2025, but this attracts penalties and may result in loss of certain benefits.
Consequences of Non-Compliance
Failure to get the accounts audited or file the tax audit report before the due date can lead to penalties. A penalty of 0.5% of the total sales, turnover, or gross receipts may be levied, with a maximum penalty of ₹1.5 lakh.
Recent Updates
The Income Tax Department has enabled Income Tax Audit via Forms 3CA-3CD and 3CB-3CD on the e-Filing ITR portal. Several key updates have also been made to the ITR forms for AY 2025-26, including revisions to capital gains reporting and the introduction of new clauses such as Clause 36B for reporting details of share buybacks.
