Tax Audit & Compliance
Tax Audit is an important income-tax compliance requirement applicable to specified businesses and professions that fall within the prescribed conditions under the Income-tax law.
Investax India provides end-to-end support for Tax Audit compliance, including audit applicability assessment, financial information review, tax computation, preparation and coordination of audit reports, statutory disclosures, e-filing and Income Tax Return filing.
Our objective is to help businesses and professionals maintain accurate records, identify tax-compliance requirements and complete the applicable reporting process within the prescribed timelines.
Important Update: Tax Audit Under the Income-tax Act, 2025
The Income-tax Act, 2025 introduces a new framework for tax audit from Tax Year 2026-27. Section 63 of the Income-tax Act, 2025 corresponds to Section 44AB of the Income-tax Act, 1961.
For FY 2025-26 / AY 2026-27, the existing Income-tax Act, 1961 continues to govern the tax audit. The applicable audit reports are Form 3CA or Form 3CB along with Form 3CD.
For Tax Year 2026-27, the new framework provides for Form 26, which consolidates the earlier Forms 3CA, 3CB and 3CD into a unified tax audit report.
Who Is Required to Get a Tax Audit?
Tax audit requirements generally apply to specified persons carrying on business or profession when the conditions prescribed under the applicable income-tax law are satisfied.
Under Section 63 of the Income-tax Act, 2025, corresponding to Section 44AB of the Income-tax Act, 1961, the principal thresholds continue to include:
- Business: Total sales, turnover or gross receipts exceeding ₹1 crore.
- Higher business threshold: The threshold may extend to ₹10 crore where cash receipts and cash payments do not exceed the prescribed 5% conditions.
- Profession: Gross receipts exceeding ₹50 lakh.
- Tax audit may also apply in certain cases involving presumptive taxation where the taxpayer declares income below the prescribed level or otherwise falls within the specified conditions.
Tax audit applicability depends on the taxpayer's facts, nature of activity, turnover or receipts, cash transactions and applicable provisions. A detailed applicability review should therefore be carried out before deciding whether an audit is required.
Tax Audit for FY 2025-26 / AY 2026-27
For FY 2025-26, the tax audit continues under the Income-tax Act, 1961. The prescribed reporting framework includes:
- Form 3CA – where accounts have been audited under another law.
- Form 3CB – for other cases covered by tax audit.
- Form 3CD – statement of prescribed particulars and disclosures.
For AY 2026-27, the Income Tax Department has specified 30 September 2026 as the tax-audit-report due date in cases where the corresponding ITR due date is 31 October 2026.
For transfer-pricing cases with an ITR due date of 30 November 2026, the tax audit report due date is correspondingly one month earlier, i.e. 31 October 2026.
Tax Audit Under the Income-tax Act, 2025
From Tax Year 2026-27, the Income-tax Act, 2025 introduces a simplified tax-audit reporting structure.
The new Form 26 consolidates the earlier Forms 3CA, 3CB and 3CD into a unified tax audit report under Section 63.
The new form is structured to bring greater standardisation to audit reporting and includes schedules and disclosures relating to matters such as losses, depreciation, deductions, prior-period items, computation of receipts or income and computation of expenses.
The Income Tax Department has prescribed 30 September 2027 as the tax-audit-report due date for Tax Year 2026-27.
What Does a Tax Audit Cover?
A tax audit involves examination and reporting of financial and tax information required under the applicable provisions. Depending on the nature of the taxpayer and applicable requirements, the process may involve:
- Review of books of account and financial records
- Verification of turnover and gross receipts
- Review of business and professional expenses
- Depreciation and asset-related information
- Tax deduction and disallowance analysis
- Loans, deposits and specified transactions
- Cash receipts and cash payments
- TDS and TCS compliance information
- GST-related information and reconciliation where relevant
- Related-party and specified transactions
- Tax computation and disclosures
- Other particulars prescribed in the applicable audit report
Our Tax Audit Services
Tax Audit Applicability
Assessment of whether the taxpayer falls within the prescribed tax-audit requirements.
Audit Report Support
Assistance with applicable tax-audit reporting and coordination of required information and documentation.
Form 3CD / Form 26
Support for the applicable reporting framework under the Income-tax Act governing the relevant tax year.
Tax Computation
Review and preparation of tax computations based on the applicable income-tax provisions.
Financial Data Review
Review of financial information, books, expenses, receipts and other information required for tax compliance.
E-Filing Compliance
Assistance with electronic submission of the applicable tax-audit report and related income-tax compliance.
Income Tax Return Filing
Post-audit support for preparation and filing of the applicable Income Tax Return.
Queries & Notices
Assistance in reviewing and responding to tax-related queries, notices and compliance requirements.
Tax Audit Process
- Applicability Assessment
Determine whether the business or profession falls within the applicable tax-audit provisions. - Document Collection
Gather books of account, financial statements, invoices, bank statements, tax records and other relevant information. - Financial & Tax Review
Review financial information and identify tax-related adjustments, disclosures and reconciliation requirements. - Audit & Reporting
The applicable tax-audit report and prescribed particulars are prepared and finalised by the authorised tax-audit professional. - E-Filing
The applicable audit report is submitted electronically through the Income Tax Department's e-filing system. - Income Tax Return Filing
The corresponding Income Tax Return is prepared and filed using the relevant audit information.
Documents Generally Required for Tax Audit
- Books of account
- Profit & Loss Account
- Balance Sheet
- Bank statements
- Sales and purchase records
- Expense details
- Fixed asset register
- GST returns and related records, where applicable
- TDS and TCS statements
- Loan and interest details
- Details of investments and specified transactions
- Previous year's tax audit report, where applicable
- Income Tax Return and tax computation details
- Other information required based on the nature of business or profession
Why Choose Investax India for Tax Audit Compliance?
- Structured tax-audit compliance process
- Support for businesses and professionals
- Detailed financial and tax information review
- Assistance with applicable audit-report documentation
- Coordination of tax computation and ITR filing
- Support for TDS, TCS and GST-related reconciliations
- Assistance with tax notices and compliance queries
- Focus on accuracy, documentation and timely compliance
Frequently Asked Questions
What is a Tax Audit?
A Tax Audit is an examination and reporting process prescribed under the Income-tax law for specified taxpayers who satisfy the applicable audit conditions.
Who is required to get a Tax Audit?
Tax audit generally applies to specified businesses and professions when the applicable turnover, receipt or other statutory conditions are satisfied.
What is the Tax Audit turnover limit?
The principal business threshold is ₹1 crore. It can extend to ₹10 crore where the prescribed cash receipt and cash payment conditions are satisfied. For specified professions, the principal gross-receipt threshold is ₹50 lakh.
What is Section 44AB?
Section 44AB of the Income-tax Act, 1961 contains the tax-audit requirements. Under the Income-tax Act, 2025, the corresponding provision is Section 63.
What is Form 3CD?
Form 3CD contains the prescribed statement of particulars associated with the tax-audit report under the Income-tax Act, 1961.
What are Forms 3CA and 3CB?
Form 3CA is applicable where the taxpayer's accounts have been audited under another law. Form 3CB applies to other specified tax-audit cases under the old framework.
What is Form 26 under the Income-tax Act, 2025?
Form 26 is the new unified tax-audit report prescribed for Tax Year 2026-27. It consolidates the earlier Forms 3CA, 3CB and 3CD.
Is Tax Audit applicable for FY 2025-26?
Yes, where the taxpayer satisfies the applicable conditions. FY 2025-26 / AY 2026-27 remains governed by the Income-tax Act, 1961 for this purpose.
What is the Tax Audit due date for AY 2026-27?
For cases where the applicable ITR due date is 31 October 2026, the tax-audit-report due date is 30 September 2026. Different timelines apply to transfer-pricing cases.
What is the Tax Audit due date under the new Act?
For Tax Year 2026-27, the Income Tax Department has prescribed 30 September 2027 as the tax-audit-report due date.
Can Investax India help with Income Tax Return filing after Tax Audit?
Yes. We can assist with the preparation and filing of the corresponding Income Tax Return using the relevant tax-audit information and tax computation.
Can Investax India help with Tax Audit notices?
Yes. We can assist in reviewing tax-related communications, notices and compliance requirements and help coordinate the appropriate response.
Complete Tax Audit & Income Tax Compliance Support
Tax Audit is more than simply submitting an audit report. Accurate financial information, appropriate tax disclosures, reconciliations and timely Income Tax Return filing all form part of a coordinated compliance process.
Investax India helps businesses and professionals manage this process in a structured manner while keeping the applicable income-tax requirements and reporting framework in focus.
Need help with your Tax Audit? Connect with Investax India for Tax Audit, tax computation, Income Tax Return filing and related compliance support.
Disclaimer
Tax audit applicability, thresholds, forms, reporting requirements and due dates depend on the applicable law and the taxpayer's specific circumstances. The information on this page is for general awareness and should be verified against the latest provisions, rules and notifications applicable to the relevant tax year.