With the 31 August deadline for non-audit for AY 2026-27 now over, the focus shifts to taxpayers whose accounts are subject to tax audit.
These taxpayers have more time to file their income tax returns (s), with the deadline set for 31 October 2026.
Who are non-audit and audit taxpayers?
Siddharth Maurya, Managing Director, Vibhavangal Anukulkara, mentioned that an individual or business is considered a tax-audit taxpayer if the conditions under Section 44AB of the Income Tax Act, 1961, are met.
He said such taxpayers are required to get their books of account audited by a Chartered Accountant. The audit involves verifying financial information such as turnover, receipts and expenses.
“A non-audit taxpayer is a person who is not required to get their accounts audited,” he noted.
Who needs a tax audit?
Maurya said that the requirement is based on the nature of the activity and turnover or gross receipts.
“For businesses, a tax audit primarily concerns profits exceeding ₹1 crore. However, this limit is raised to ₹10 crore where the cash receipts and cash payments levels are less than 5% of total receipts and payments, respectively,” he noted.
For professionals, the general threshold is ₹50 lakh in gross receipts. Tax-audit requirements can also arise when a taxpayer using the declares income below the mandatory presumptive level or opts out of the scheme, he added.
Do the audit rules differ for salaried individuals and others?
Yes. Maurya said the criteria can vary significantly based on the source and nature of income.
“A purely salaried individual does not typically fall under a tax audit based on high salary. Audit provisions come into play where the individual carries on a business or profession or meets other prescribed conditions,” he noted.
He explained the tax-audit thresholds:
- Freelancers and professionals: The applicable threshold depends on the nature of the activity and gross receipts. If the activity falls under a specified profession, the ₹50 lakh gross receipts threshold applies.
- Business owners: The threshold is ₹1 crore, but can rise to ₹10 crore if specified cash transaction conditions are met.
Which ITR forms apply for both?
Maurya said no ITR forms are exclusively for “audit” or “non-audit” taxpayers. The applicable ITR form depends on the taxpayer’s income sources and status.
“For AY 2026-27, the Income Tax Department indicates ITR-3 for individuals/HUFs with business or professional income, and ITR-4 for eligible taxpayers using the presumptive taxation provisions,” he noted.
He added that taxpayers are required to file tax audit reports (Form 3CA/3CD/3CB/3CD), along with the application for tax audit.
Why is the deadline different for audit and non-audit taxpayers?
Maurya said the deadlines are primarily based on the order of compliance. For AY 2026-27, the tax-audit report is due by 30 September 2026, while the ITR filing deadline for audit cases is 31 October 2026. The audit report contains the financial and other information that forms the basis of the return.
“Audit cases are usually given a later ITR filing deadline than non-audit cases. The longer ITR filing deadline is not necessarily a relaxation afforded to the higher-income taxpayers. It recognizes the additional compliance burden of the accounts audit, preparation of the prescribed audit report, and incorporation of the information contained in the audit into the return,” he mentioned.
Disclaimer: This is only for informational and educational purposes. Please consult a qualified expert for the latest laws and regulations.