Tax Audit for the F.Y. 2024-25 (A.Y. 2025-26)

📑 Tax Audit Applicability, Due Dates & Information for AY 2025-26

Tax Audit is a statutory requirement under the Income Tax Act, 1961, applicable when turnover, receipts, or profits cross certain prescribed thresholds. It ensures proper compliance, transparency, and accuracy in financial reporting.

✅ Tax Audit Applicability – Section 44AB

1. For Businesses

Tax audit is applicable if turnover exceeds ₹1 crore in a financial year.

The limit is extended up to ₹10 crores where cash transactions (both receipts and payments) do not exceed 5% of total transactions.

Example:

Mr. Prabhas runs a wholesale trading business with an annual turnover of ₹6.5 crores, out of which 98% transactions are digital. Since cash dealings are less than 5%, he does not require a tax audit.

However, if Mr. Prabhas had received 20% of turnover in cash, a tax audit would be mandatory, as the ₹1 crore limit would then apply.

2. For Professionals

Tax audit is applicable if gross professional receipts exceed ₹50 lakhs in a financial year.

Example:

Dr. Sanjiv Gupta, a practicing doctor, earns ₹65 lakhs from consultation fees and hospital visits during FY 2024-25. Since her receipts exceed the ₹50 lakh threshold, she is liable for a tax audit under Section 44AB.

3. Presumptive Taxation Cases (Sec 44AD, 44ADA, 44AE)

If an assessee under presumptive taxation declares income lower than the prescribed rate and total income exceeds the basic exemption limit, tax audit becomes mandatory.

📆 Tax Audit Due Date – AY 2025-26

30th September 2025 → Last date to furnish Tax Audit Report (Form 3CD).

31st October 2025 → Last date to file the Income Tax Return (ITR) for assessee subject to audit.

⚠ Penalty for non-compliance (Section 271B): 0.5% of turnover/gross receipts or ₹1,50,000 – whichever is lower.

📌 Why Tax Audit is Important

Ensures accuracy of financial statements.

Facilitates reconciliation between Income Tax and GST records.

Helps avoid scrutiny, penalties, and litigation.

Builds financial transparency and credibility with stakeholders.

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