Update (5 November 2026): the 30 September 2026 due date for FY 2025-26 has passed; for that year the audit is under Section 44AB of the Income-tax Act, 1961. From tax year 2026-27 the requirement is in Section 63 of the Income Tax Act, 2025, and presumptive taxation in Section 58 (Sections 44AD/44ADA). The next tax audit report is due by 30 September 2027.
Quick answer: If your business turnover crossed ₹1 crore in FY 2025-26 (₹10 crore if cash transactions stayed under 5% of total receipts and payments), or your professional gross receipts crossed ₹50 lakh, you likely need a tax audit under Section 44AB. The audit report is due 30 September 2026, and your ITR is due 31 October 2026. Miss it, and the penalty is 0.5% of turnover, capped at ₹1.5 lakh, plus a higher audit risk on your file going forward.
Why this deadline catches more businesses off guard than it should
Every year, a predictable group of business owners realises they need a tax audit in the second half of September, usually because their turnover crossed the threshold mid-year and nobody flagged it in time. A tax audit isn’t something you can complete in a weekend. Books need to be reviewed, discrepancies need to be resolved, and Form 3CD has actually seen clause-level changes this year, which means even businesses that filed smoothly last year shouldn’t assume this year’s process looks identical.
Who actually needs a tax audit for FY 2025-26 (AY 2026-27)
- Business (regular): Mandatory if turnover exceeds ₹1 crore.
- Business (mostly digital): Threshold rises to ₹10 crore if both cash receipts and cash payments stay within 5% of total transactions for the year.
- Profession: Mandatory if gross receipts exceed ₹50 lakh. This limit does not get the digital-transaction relaxation, it stays at ₹50 lakh regardless of how you’re paid.
- Presumptive scheme exits: If you were under Section 44AD or 44ADA and declared income below the presumptive rate (6-8% for business, 50% for eligible professionals), or you opted out of the presumptive scheme within five years of opting in, audit can be triggered even below the standard turnover threshold.
Key dates for AY 2026-27
- 30 September 2026 — Tax audit report (Form 3CA/3CB and 3CD) due
- 31 October 2026 — ITR due for taxpayers who require a tax audit
- 31 October 2026 — Also applies to taxpayers covered under transfer pricing provisions, with the audit report itself due by this date
What actually happens if you miss it
The fee under Section 271B is the lower of 0.5% of turnover or ₹1.5 lakh, so it scales with your business size rather than being a flat hit. But the fee is rarely the real cost. A missed or late audit tends to flag your file for closer scrutiny in future years, delays your ITR filing (since the audit has to be completed first), and in the meantime you’re operating without the clean compliance record that lenders and investors often ask to see during due diligence.
If you can show reasonable cause for the delay, tribunals have accepted genuine hardship in the past, but “we didn’t realise our turnover had crossed the threshold” doesn’t typically qualify. That’s exactly the kind of gap a periodic check-in with your CA is meant to catch before September.
What to have ready before your audit starts
- Updated books of accounts, cash book, ledgers, bank statements reconciled through year-end
- Sales and purchase invoices, especially anything with GST implications
- Stock records if you carry inventory
- Details of related-party transactions, these get specific scrutiny under the revised Form 3CD clauses this year
- Loan and investment documentation for the year
The earlier your CA gets these, the more time there is to resolve discrepancies before the deadline, rather than discovering them in the last week of September.
Not sure if you cross the threshold, or already know you’re cutting it close?
If you’re unsure whether your business or practice actually needs a tax audit this year, or you know you do and want it handled properly rather than rushed through in the final weeks, our team can review your turnover and books now, while there’s still time to do this right.