Reviewed by CA & CS Team · Regikart | Last Updated: 6 June 2026 | Reading time: ~9 minutes
| Question | Quick answer |
|---|---|
| Business threshold | Turnover above Rs. 1 crore — raised to Rs. 10 crore if both cash receipts and cash payments stay within 5% of the totals. |
| Professional threshold | Gross receipts above Rs. 50 lakh (no enhanced digital limit). |
| Audit report due | 30 September 2026 for AY 2026-27 (normal cases). |
| ITR for audit cases | 31 October 2026. |
| Penalty (Section 271B) | The lower of 0.5% of turnover/receipts or Rs. 1.5 lakh. |
A tax audit is not about wrongdoing — it is a chartered accountant’s independent check that your books and income are reported correctly. The question most businesses get wrong is whether they even need one. This guide sets out the Section 44AB thresholds, the forms, the AY 2026-27 dates, and the traps that catch people who think they are below the line.
What is a tax audit under Section 44AB?
A tax audit is an examination of a taxpayer’s books of account by a chartered accountant to verify that income, deductions and compliance with the Income-tax Act are correctly reflected. The CA reviews the cash book, ledgers, bank statements, stock records and sales/purchase invoices, and reports the findings to the department.
For AY 2026-27 (FY 2025-26 income), the audit is conducted under Section 44AB of the Income-tax Act, 1961. The new Income-tax Act, 2025 carries the same requirement as Section 63 — but that applies from Tax Year 2026-27, mainly to audits due in 2027.
Who needs a tax audit? The thresholds
| Category | Audit required if |
|---|---|
| Business | Total sales/turnover/gross receipts exceed Rs. 1 crore in the year. The threshold rises to Rs. 10 crore if cash receipts AND cash payments are each within 5% of the totals (i.e. the business is effectively digital). |
| Profession | Gross receipts exceed Rs. 50 lakh in the year. There is no Rs. 10 crore digital relaxation for professionals. |
| Presumptive (44AD / 44ADA) | You declare profit below the deemed rate (e.g. below 50% under 44ADA) AND your total income exceeds the basic exemption limit. Also where a 44AD opt-out triggers the 5-year lock-in rule. |
Which forms are used?
- Form 3CA-3CD — where the accounts are already audited under another law (typically the Companies Act, 2013). The tax-audit clauses sit in Form 3CD.
- Form 3CB-3CD — where no other audit applies and the tax-audit CA is the only auditor.
- Form 3CD — the detailed statement of particulars (the 40-plus clause schedule) attached to either of the above.
For AY 2026-27, these existing forms continue. Form No. 26 under the new Act becomes relevant for audits due from 2027 — do not assume it applies to the September 2026 audit.
The AY 2026-27 deadlines
| Filing | Due date |
|---|---|
| Tax audit report (3CA/3CB-3CD) — normal cases | 30 September 2026 |
| ITR for audit cases | 31 October 2026 |
| Transfer pricing audit report (3CEB) | 31 October 2026 |
| ITR for transfer pricing cases | 30 November 2026 |
The audit report is filed electronically on the e-filing portal and must be accepted by the taxpayer before the ITR is filed. Plan for the 30 September date and treat any CBDT extension as a bonus, not a planning assumption.
Penalty for missing the tax audit
Failure to get the accounts audited or to furnish the report by the due date attracts a penalty under Section 271B — the lower of 0.5% of total sales, turnover or gross receipts or Rs. 1.5 lakh. As proposed in Budget 2026, this is being recast as a fee rather than a penalty, though the amount is unchanged. Relief is possible under Section 273B where there is a reasonable cause for the delay.
Common mistakes to avoid
- Assuming “under Rs. 1 crore = no audit.” The presumptive trap under 44AD/44ADA can pull you in well below that.
- Claiming the Rs. 10 crore limit as a professional. The digital safe-harbour is for businesses only.
- Confusing tax audit with statutory audit. A company audit under the Companies Act does not remove the separate Section 44AB test — it changes which form (3CA) you use.
- Starting in September. Reconciliation should begin in August; a clean set of books makes the audit fast and the deadline comfortable.
How tax audit fits the compliance picture
The Section 44AB audit links the books to the return: the CA verifies the accounts, files Form 3CA/3CB-3CD with Form 3CD on the portal, the taxpayer accepts it, and the ITR for audit cases follows by 31 October. It is distinct from a company’s statutory audit under the Companies Act and from a GST audit, each of which tests different rules over the same underlying records.
Key takeaways
- Business audit threshold is Rs. 1 crore (Rs. 10 crore if effectively digital); professionals Rs. 50 lakh.
- Presumptive taxpayers can be pulled in even below those limits.
- Report due 30 September 2026; audit-case ITR due 31 October 2026.
- Forms 3CA/3CB-3CD continue for AY 2026-27; Form 26 applies from 2027.
- Section 271B penalty is the lower of 0.5% of turnover or Rs. 1.5 lakh.
Frequently asked questions
What is the turnover limit for a tax audit?
Rs. 1 crore for business, rising to Rs. 10 crore if both cash receipts and cash payments stay within 5% of the totals. For professionals, gross receipts above Rs. 50 lakh.
When is the tax audit report due for AY 2026-27?
30 September 2026 for normal cases. The ITR for audit cases is then due 31 October 2026.
Do professionals get the Rs. 10 crore digital limit?
No. The Rs. 10 crore relaxation applies only to businesses. Professionals are audited once gross receipts exceed Rs. 50 lakh, regardless of digital payment levels.
What forms are used for a tax audit?
Form 3CA-3CD when accounts are already audited under another law, or Form 3CB-3CD when the tax-audit CA is the only auditor; both carry the detailed Form 3CD.
Can presumptive taxpayers be required to audit?
Yes. If you declare profit below the deemed rate under 44AD/44ADA and your total income exceeds the basic exemption limit, an audit can be triggered even below the normal turnover limits.
What is the penalty for not getting a tax audit done?
Under Section 271B, the lower of 0.5% of turnover/gross receipts or Rs. 1.5 lakh. Relief is possible under Section 273B for a reasonable cause.
Tax audit ki last date kya hai AY 2026-27 ke liye?
Normal cases ke liye tax audit report 30 September 2026 tak, aur audit cases ki ITR 31 October 2026 tak file karni hoti hai.
Is tax audit the same as company statutory audit?
No. A company’s statutory audit under the Companies Act is separate. The Section 44AB tax audit is tested on its own; if a statutory audit already exists, you use Form 3CA.
Need help with your tax audit?
Whether the question is “do I even need an audit?” or you want a clean, on-time 3CD, Regikart’s CA & CS team handles tax audits end to end — from threshold assessment to filing the report before 30 September. Reach us at +91 70444 94804 or [email protected].
Related reading: see the ITR filing guide for AY 2026-27 at /blog/itr-filing-ay-2026-27-due-dates.
About the author
CA & CS Team
Reviewed by Regikart at Regikart. Want to discuss this in the context of your business?