What is a tax audit under Section 44AB?
A tax audit is a Chartered Accountant's examination of your books to check that your income, expenses and deductions are correctly stated for income tax. It is compulsory under section 44AB of the Income-tax Act, 1961 once your turnover or receipts cross the limits below.
The auditor does not file your return. The auditor reports facts and observations in a prescribed format, and your income tax return must be consistent with that report. For FY 2025-26 (AY 2026-27) the report is in Form 3CA or Form 3CB, with the statement of particulars in Form 3CD.
From Tax Year 2026-27, the Income-tax Act, 2025 applies. Section 44AB becomes section 63, and the three forms are merged into one, Form 26. We explain the change further down.
Tax audit due date for AY 2026-27
The tax audit report for FY 2025-26 (AY 2026-27) must be filed by 30 September 2026. The income tax return for audit cases is due 31 October 2026.
| Filing | Who | Due date |
|---|---|---|
| Tax audit report (Form 3CA or 3CB with Form 3CD) | Businesses and professionals covered by section 44AB | 30 September 2026 |
| Income tax return | Taxpayers whose accounts are audited under section 44AB | 31 October 2026 |
| Transfer pricing report (Form 3CEB) | Taxpayers with international or specified domestic transactions | 31 October 2026 |
| Income tax return | Taxpayers who must file Form 3CEB | 30 November 2026 |
| Belated return | Anyone who missed the original return due date | 31 December 2026 |
The law fixes the audit date at one month before the return due date. Since the return for audit cases is due 31 October 2026, the report is due 30 September 2026.
As of 21 September 2026, the CBDT has not notified any extension of the 30 September 2026 date. Professional bodies have asked for one, but a request is not an extension. Plan to file by 30 September 2026. If the CBDT issues an official extension, we will update this page.
Who needs a tax audit?
You need a tax audit for FY 2025-26 if any one of these applies to you.
| Your case | Tax audit applies when |
|---|---|
| Business | Total sales, turnover or gross receipts exceed ₹1 crore |
| Business with low cash dealings | Turnover exceeds ₹10 crore, where cash receipts are within 5% of total receipts and cash payments are within 5% of total payments |
| Profession (doctors, lawyers, architects, consultants and others) | Gross receipts exceed ₹50 lakh |
| Business that opted out of presumptive tax under section 44AD | Profit declared below the presumptive rate and total income above the basic exemption limit, even if turnover is below ₹1 crore |
| Profession under section 44ADA | Profit declared below 50% of receipts and total income above the basic exemption limit |
| Goods carriage business under section 44AE | Profit declared below the presumptive amount |
The ₹10 crore limit and the 5% cash test
The ₹10 crore limit applies only if both conditions hold: cash receipts are within 5% of all receipts, and cash payments are within 5% of all payments. Receipts by a cheque or bank draft that is not account payee count as cash for this test.
If either figure crosses 5%, the ₹1 crore limit applies. We test both ratios from your bank statements and cash book before deciding.
Presumptive taxpayers who declare lower profit
Under section 44AD, an eligible business with turnover up to ₹2 crore (₹3 crore where cash receipts are within 5%) can declare profit at 8% of turnover, or 6% on receipts through banking channels. If you do that, no tax audit is needed.
If you declare lower profit instead, and your total income is above the basic exemption limit, section 44AD(4) applies. You must keep books and get them audited, and you cannot use section 44AD again for the next five assessment years.
Professionals using section 44ADA declare 50% of gross receipts as profit. A professional who declares less than 50%, with total income above the basic exemption limit, needs a tax audit.
Futures and options traders
Trading in futures and options is usually treated as business income, so the audit test depends on turnover. F&O turnover is not the contract value. It is worked out using the method in the ICAI Guidance Note on Tax Audit, which is broadly the total of the profits and losses on each trade.
A trader with a loss can also fall under the section 44AD(4) test above. We compute your turnover and check both tests before you decide. A dedicated guide is coming at ITR for F&O traders.
Form 3CA, 3CB and 3CD: which report applies
For AY 2026-27, the report you file depends on whether another law already requires your accounts to be audited.
| Form | When it is used |
|---|---|
| Form 3CA | Your accounts are audited under another law, such as a company audited under the Companies Act, 2013 |
| Form 3CB | No other law requires an audit, for example most proprietors, professionals and many partnership firms |
| Form 3CD | The statement of particulars, filed with either Form 3CA or Form 3CB |
A company's statutory audit under the Companies Act and its tax audit are separate reports, though the same CA can sign both. If your company's statutory audit is not yet final, the tax audit cannot be finalised either, so start that first. Our annual ROC filing team works to the same calendar.
From Tax Year 2026-27: Form 26 under section 63
From Tax Year 2026-27 (income earned from 1 April 2026), the Income-tax Act, 2025 applies, and the tax audit is under section 63. Forms 3CA, 3CB and 3CD are replaced by one form, Form 26.
| Point | FY 2025-26 (AY 2026-27) | Tax Year 2026-27 onwards |
|---|---|---|
| Law | Income-tax Act, 1961 | Income-tax Act, 2025 |
| Section | 44AB | 63 |
| Report | Form 3CA or 3CB, with Form 3CD | Form 26 |
| Turnover limits | ₹1 crore; ₹10 crore with the 5% cash test; ₹50 lakh for professions | Same limits |
| UDIN | Generated by the CA for the report | Mandatory and quoted in Form 26 |
| Due date | One month before the return due date: 30 September 2026 | One month before the return due date under section 263(1) |
| Consequence of default | Penalty under section 271B | Governed by the Income-tax Act, 2025 |
The first Form 26 reports will be filed in 2027, for Tax Year 2026-27. The records you keep from April 2026 are what that audit will test, so set up clean books now. See our accounting services.
What the auditor checks in Form 3CD
Form 3CD asks the auditor to report on a long list of particulars. In plain words, these are the areas we examine.
- Books and method: which books you keep, the method of accounting, and how closing stock is valued.
- Turnover and receipts: that sales and receipts in the books match GST returns and bank credits.
- Payments that are disallowed: expenses on which TDS was not deducted or not deposited in time, and payments that the law does not allow.
- Cash transactions: cash payments and receipts above the limits the Act sets.
- Payments to related persons: amounts paid to relatives, partners, directors or connected concerns, and whether they are reasonable.
- Statutory dues: employer and employee PF and ESI contributions, and taxes and duties paid after the year end.
- Depreciation: additions, disposals and rates block by block, from your fixed asset register.
- Loans and deposits: loans and deposits taken or repaid in cash, and squared-up amounts.
- Brought-forward losses: losses and depreciation carried from earlier years.
- TDS and TCS compliance: whether deductions were made, deposited and reported on time.
- Quantitative details and ratios: for traders and manufacturers, stock quantities and key ratios such as gross profit.
- GST: turnover as per GST returns, for businesses that are registered.
Every observation goes on record. A clean Form 3CD is the result of fixing issues before the report is signed, not after.
Penalty for not getting a tax audit
For AY 2026-27, if you do not get your accounts audited or do not file the report on time, the penalty under section 271B is 0.5% of your total sales, turnover or gross receipts, or ₹1,50,000, whichever is less.
No penalty is imposed if you prove there was a reasonable cause for the failure (section 273B). Do not rely on that. Reasonable cause is decided case by case, and portal load in the last week is rarely enough.
A worked example
| Your turnover | 0.5% of turnover | Penalty under section 271B |
|---|---|---|
| ₹1,20,00,000 | ₹60,000 | ₹60,000 |
| ₹2,00,00,000 | ₹1,00,000 | ₹1,00,000 |
| ₹5,00,00,000 | ₹2,50,000 | ₹1,50,000 (cap applies) |
This penalty is separate from our fee and is paid to the government. There is no government fee to file an audit report on time.
From Tax Year 2026-27
From Tax Year 2026-27, the consequence of a missing or late tax audit report is governed by the Income-tax Act, 2025, not by section 271B. We will confirm how it applies to your case when we plan your Form 26 audit.
Our tax audit fee
Our professional fee for a tax audit starts at ₹7,499. There is no government fee to file the audit report.
| Fee | Amount |
|---|---|
| Regikart professional fee, tax audit under section 44AB (Form 3CA or 3CB with Form 3CD) | From ₹7,499 |
| Government fee to file the tax audit report | No government fee |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 21 September 2026.
The final fee depends on turnover, the number of bank accounts and transactions, and whether your books are already closed. We confirm it in writing before we start.
What is included
- Applicability check under section 44AB, including the 5% cash test and presumptive opt-out rules
- Selection of Form 3CA or 3CB
- Examination of books, ledgers, bank statements and statutory dues
- Clause-by-clause preparation of Form 3CD
- A list of disallowances and adjustments for your return
- Audit report signed by a practising CA with UDIN
- Upload on the e-filing portal with the CA's digital signature, and help with your acceptance
Books not written up for the year? We can prepare them first through our accounting services, quoted separately.
How our tax audit works
The audit runs in four steps. Once your books are final, it usually takes us 15-21 working days in our experience.
- Scope. We confirm that section 44AB applies, which limit you fall under, and whether you need Form 3CA or 3CB.
- Examine. We review your ledgers, bank statements, GST and TDS returns, statutory dues and fixed assets, and send you a list of queries.
- Report. We finalise Form 3CD with every disallowance and observation, share a draft with you, and sign the report with UDIN.
- File. We upload the report on the e-filing portal with the CA's digital signature. You accept it from your login and complete e-verification. We then prepare your return so it matches the report.
A timeline that avoids the last week
The portal slows down in the last week of September every year. Work back from the due date.
| By | What should be done |
|---|---|
| 31 July | Books closed for the year; bank, GST and TDS reconciled |
| 31 August | Queries raised and answered; statutory audit final for companies |
| 15 September | Draft Form 3CD shared and reviewed by you |
| 25 September | Report uploaded and accepted by you |
| 30 September 2026 | Legal due date |
| 31 October 2026 | Income tax return due for audit cases |
If you are starting late this year, send your books now. We tell you on day one whether the date can be met. For your return, see ITR for business. For the instalments due during the year, see advance tax.
Documents we need
- Finalised financial statements (balance sheet and profit and loss account)
- Trial balance and general ledger for the full year
- Bank statements for every account
- Sales, purchase and expense registers
- GST returns for the year: GSTR-1, GSTR-3B and, if filed, GSTR-9. See GST return filing
- TDS returns and challans. See TDS return filing
- Fixed asset register with additions, disposals and bills
- Loan confirmations and details of loans or deposits taken or repaid
- Details of payments to relatives, partners or directors
- Last year's tax audit report and income tax return, if any
- For companies: the statutory audit report and signed financial statements
UDIN and filing on the portal
A UDIN is the Unique Document Identification Number that a practising CA generates from ICAI for each report or certificate they sign. ICAI has required UDIN on audit reports since 2019, and it lets anyone verify that the report is genuine.
On the e-filing portal, the process is:
- You assign Regikart's CA to Form 3CA-3CD or 3CB-3CD from your login.
- The CA, registered on the portal, accepts the assignment.
- The CA uploads the report with a digital signature certificate.
- You accept the uploaded report from your worklist and e-verify it.
The report is complete only after step 4, so keep your login and the Aadhaar-linked mobile handy in the last days. From Tax Year 2026-27, UDIN is mandatory and is quoted in Form 26 itself.
Why Regikart for your tax audit
Regikart is a CA and CS firm serving 250+ clients from offices in Kolkata (head office), Delhi and Bengaluru. Every tax audit is examined and signed by a practising Chartered Accountant.
- Fee in writing before we start: from ₹7,499, with no government fee to file.
- Applicability first: we check the ₹1 crore, ₹10 crore and presumptive tests before you pay for an audit you may not need.
- Return and audit together: the same team prepares your return, so the figures match.
- Year-round help: we can keep your books, GST and TDS through the year so next year's audit is quicker. If a notice arrives after filing, see income tax notice reply.
- Related audits and returns: statutory audit, internal audit and GSTR-9C.