Tax Audit in India: Applicability, Due Dates and Penalties

A tax audit is an examination of a taxpayer’s accounts by a chartered accountant to check that income is correctly computed and tax laws are followed. It is required when turnover or receipts cross certain limits, and was earlier known as the audit under Section 44AB.

Note: the Income-tax Act, 2025 has replaced the Income-tax Act, 1961 from 1 April 2026. Section numbers have changed, but the concepts explained here continue. Always check the provisions that apply to your financial year.

When is a tax audit required?

• Businesses – when turnover exceeds the prescribed limit. A higher limit applies when cash transactions are very small.
• Professionals – when gross receipts exceed the prescribed limit.
• Presumptive taxpayers – in certain cases when they declare profit lower than the presumptive rate and their income exceeds the basic exemption limit.

Who conducts it?

Only a practising chartered accountant can conduct a tax audit. The auditor gives a report in the prescribed form along with detailed particulars.

Audit forms

• Form 3CA – when accounts are already audited under another law (for example, companies).
• Form 3CB – when accounts are not audited under any other law.
• Form 3CD – detailed statement of particulars, attached to both.

Due dates

The tax audit report is generally due by 30 September of the assessment year, and the income tax return for audit cases by 31 October. These dates are sometimes extended by the government.

Penalty

Failing to get accounts audited or to furnish the report on time can attract a penalty linked to turnover, subject to a maximum amount, unless there is a reasonable cause.

How to prepare

• Keep books of account up to date throughout the year.
• Reconcile GST returns with your books.
• Maintain records of TDS deducted and deposited.
• Keep fixed asset and depreciation records.

Our team handles tax audits and returns for businesses of every size: taxation services.

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Frequently Asked Questions

Q1. Is tax audit the same as statutory audit?

No. A statutory audit is under company law; a tax audit is under income tax law. A company may need both.

Q2. Who files the tax audit report?

The chartered accountant uploads it, and the taxpayer approves it on the income tax portal.

Q3. What is the due date for a tax audit report?

Generally 30 September of the assessment year, unless extended.

Q4. Does every company need a tax audit?

Only if its turnover exceeds the tax audit limit.