Tax Audit under Section 44AB: Limits, Due Dates & Penalty (AY 2026-27)
Last verified: June 2026, against the Income Tax Act provisions cited below. Figures apply to FY 2025-26 (AY 2026-27). This is general information, not personal tax advice.
Once your business turnover or professional receipts cross certain limits, the law requires your accounts to be audited by a Chartered Accountant under Section 44AB — a “tax audit”. Get the thresholds wrong and you risk a penalty of up to ₹1.5 lakh. Here is who needs a tax audit for AY 2026-27 and by when.
Who must get a tax audit
| Taxpayer | Audit required if… |
|---|---|
| Business | Turnover exceeds ₹1 crore |
| Business (mostly digital) | Turnover up to ₹10 crore is exempt if at least 95% of receipts and payments are non-cash |
| Profession | Gross receipts exceed ₹50 lakh |
| Presumptive scheme | You declare income lower than the deemed profit under 44AD/44ADA and your total income exceeds the basic exemption limit |
The ₹10 crore digital threshold is a big relief for businesses that transact almost entirely through banking channels. For thresholds and how presumptive taxation interacts with audit, see presumptive taxation under 44AD/44ADA/44AE.
What the audit involves
A Chartered Accountant examines your books and files an audit report — Form 3CA/3CB along with the detailed statement of particulars in Form 3CD — on the income-tax portal. You then file your ITR referencing this report.
Due dates for AY 2026-27
- Tax audit report: 30 September 2026.
- ITR for audit cases: 31 October 2026.
(For comparison, non-audit ITR-1/ITR-2 filers have a 31 July 2026 due date.)
Penalty for not getting audited — Section 271B
Failing to get the audit done or file the report on time can attract a penalty of 0.5% of turnover/gross receipts, capped at ₹1,50,000. The penalty can be waived if you show reasonable cause.
FAQs
Is the business audit limit ₹1 crore or ₹10 crore?
₹1 crore by default. It rises to ₹10 crore only if at least 95% of both receipts and payments are non-cash.
What is the audit limit for professionals?
Gross receipts above ₹50 lakh in the year.
I am under presumptive taxation — do I need an audit?
Only if you declare income below the deemed rate and your total income exceeds the basic exemption limit.
What is the penalty for missing the tax audit?
Up to 0.5% of turnover, subject to a maximum of ₹1,50,000, under Section 271B.
