Do I Need a Tax Audit? — FY 2025-26

Three-question decision tool covering Tax Audit applicability under the Income-tax Act, 1961 (Section 44AB) for FY 2025-26 and the Income-tax Act, 2025 (Section 63 of the new Act) for FY 2026-27 onwards, and Statutory Audit under the Companies Act, 2013. Tax audit reports for FY 2025-26 use Form 3CA / 3CB / 3CD; from FY 2026-27, the new consolidated Form 26 applies.

Financial Year

For FY 2025-26 (assessed in AY 2026-27), Tax Audit applies under Section 44AB of the Income-tax Act, 1961, and the report is filed in Form 3CA / 3CB / 3CD. From FY 2026-27, the new Income-tax Act, 2025 applies — Section 63 with the consolidated Form 26.

Step 1 of 3
What is your taxpayer type?
Step 2 of 3
What kind of activity do you carry on?
Step 3 of 3
Enter your numbers for the financial year

Tax Audit thresholds at a glance — Section 63 of the Income-tax Act, 2025 (earlier Section 44AB)

The Income-tax Act, 2025 came into force on 1 April 2026 and replaces the 1961 Act. The substantive thresholds and triggers below remain the same; the section number is renumbered (44AB → 63) and the report form is consolidated (3CA / 3CB / 3CD → Form 26).

  • Business — clause (a) [earlier 44AB(a)]: Tax audit mandatory if turnover > ₹1 crore. Threshold raised to ₹10 crore if cash receipts and cash payments do not exceed 5% of total.
  • Profession — clause (b) [earlier 44AB(b)]: Tax audit mandatory if gross receipts > ₹50 lakh.
  • Presumptive business opt-out — clause (e) [earlier 44AB(e)]: Audit triggered for a business taxpayer who earlier opted into the 44AD presumptive scheme, then opts out, and total income exceeds basic exemption — lock-in for 5 years.
  • Profession lower-than-presumed profit — clause (d) [earlier 44AB(d)]: Audit triggered for a profession declaring profit lower than 50% of receipts when total income exceeds the basic exemption.
  • Companies Act statutory audit: Every company (Pvt Ltd, Public Ltd, OPC, Section 8) regardless of turnover, under Section 139 of the Companies Act, 2013.
  • LLP audit: Mandatory if turnover > ₹40 lakh or contribution > ₹25 lakh (Section 34(4) of the LLP Act, 2008).

Filing deadline: Tax audit report (Form 26 — consolidated; replaces Form 3CA / 3CB / 3CD from FY 2025-26 onward) is due by 30 September following the financial year (extended date applies for transfer pricing audit cases). Penalty for non-compliance is 0.5% of turnover, capped at ₹1.5 lakh, under the penalty provisions of the Income-tax Act, 2025 (corresponding to earlier Section 271B of the 1961 Act).

Need a Tax Audit Engagement?

Tax Pandey conducts Tax Audit under Section 63 of the Income-tax Act, 2025 (earlier Section 44AB) and Statutory Audit under the Companies Act, 2013 for businesses across multiple industries. Engagement is partner-led with a written letter of engagement.

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