Tax audit deadline 2025: September 30, 2025, remains the cut-off date for eligible taxpayers, including specific individuals, to file their income tax audit reports. For clarity, tax audits can only be conducted by a chartered accountant utilising income tax forms 3CA, 3CD, and 3CB. Taxpayers must submit their Income Tax Audit report via the e-filing ITR portal by September 30, 2025. Those requiring a tax audit report must subsequently file their ITR by October 31, 2025.
Income Tax Audit report: Who needs to file it?
Tax audit requirements for AY 2025-26, as explained by Chartered Accountant Abhishek Soni, co-founder of Tax2Win in an ET report, fall under Section 44AB and apply to:– Businesses with turnover above Rs 1 crore (limit increases to Rs 10 crore if cash transactions are ≤ 5%).– Professionals with gross receipts above Rs 50 lakh.– People under presumptive taxation (44AD/44ADA/44AE), if they declare lower profits than prescribed, and their income exceeds the basic exemption limit.
Income Tax Audit Deadline: What Happens to Late Submissions?
Regarding late submissions, Soni explains that failure to submit the tax audit report by September 30, 2025, under Section 44AB may result in penalties under Section 271B.“This penalty is 0.5% of your turnover or gross receipts, capped at Rs 1.5 lakh, unless you can demonstrate a reasonable cause. For instance, a serious illness, natural disaster, or technical glitch. Even if the penalty applies, you can still submit the audit report later, but the risk of penalty remains unless adequately justified to the tax officer,” ET quotes him as saying.If your accounts require tax audit under Section 44AB and you haven’t submitted the audit report, filing a valid ITR by October 31, 2025, becomes problematic. However, whilst missing the September 30, 2025, deadline for tax audit submission, you maintain the option to submit it afterwards with applicable penalties.Soni says “The income tax portal usually requires the audit report to be uploaded before or along with the ITR. Filing without it may lead to the ITR being treated as defective or even invalid under Section 139(9). In such cases, the taxpayer risks penalties, interest, and notices from the department.”
Income Tax Audit Forms: Top changes
According to Riaz Thingna, Partner, Grant Thornton Bharat: “The Central Board of Direct Taxes (CBDT) has notified amendments in Form No. 3CD (Tax Audit Report under Section 44AB of the Income-tax Act, 1961 (‘IT Act’)), with an aim to improve tax audit reporting and alignment with recent legislative changes. These amendments are effective from April 1, 2025. The changes have been made to multiple clauses, and significant changes include:Settlement Payment Requirements (Clause 21(a))Reporting is now required for expenditure incurred in settling proceedings related to contraventions specified by the central government in the Official Gazette.Share Buy-back Reporting (Clause 36B)Documentation is necessary for amounts received during share buy-backs under Section 2(22)(f) of the IT Act, including acquisition costs.Enhanced MSME Documentation (Clause 22)New requirements include reporting payments due to MSMEs under the MSMED Act, specifying amounts paid within statutory timeframes and those exceeding prescribed limits, which are not permissible under the IT Act.Outdated Deduction Sections EliminatedThe form no longer includes sections 32AC, 32AD, 35AC, and 35CCB, ensuring compatibility with current IT Act provisions.Digital Verification UpdateIndividual taxpayers and HUFs can now authenticate Form 3CB-3CD using Electronic Verification Code (EVC), reducing dependence on Digital Signature Certificates.
