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AY 2026-27 · FY 2025-26 · Section 44AB

Tax Audit Applicability under Section 44AB

Do you actually need a tax audit this year? Here are the exact turnover and receipt limits, the ₹10 crore digital relief, the presumptive-scheme triggers that catch people out, and the 30 September / 31 October deadlines — for FY 2025-26.

Check if a tax audit applies to you Ask a CA on WhatsApp
✓ Signed by a practising CA✓ Form 3CA/3CB & 3CD✓ Filed before the deadline
Quick Answer

When is a tax audit required?

A tax audit under Section 44AB is a Chartered Accountant's examination of your books, required once your turnover or receipts cross set limits. It is reported in Form 3CA/3CB and 3CD and filed with a valid UDIN. The headline triggers for FY 2025-26:

BusinessTurnover above ₹1 crore — or above ₹10 crore if cash stays within 5% of receipts and payments.
ProfessionGross receipts above ₹50 lakh. There is no digital enhancement for professionals.
Presumptive casesDeclaring below the deemed rate (44AD/44ADA) with income above the exemption limit triggers an audit.
DeadlinesAudit report by 30 September 2026; the related ITR by 31 October 2026.

Who needs a tax audit — the thresholds

Section 44AB sets different limits for business, profession and presumptive cases. Find your category first.

Business · 44AB(a)

Turnover test

₹1 crore

Audit once turnover crosses ₹1 crore — lifted to ₹10 crore where cash is within 5% of both receipts and payments.

Profession · 44AB(b)

Receipts test

₹50 lakh

Audit once gross professional receipts cross ₹50 lakh. There is no ₹10 crore-style digital relief for professionals.

Presumptive · 44AB(d)/(e)

Low-profit test

Below rate

Declare below the 44AD/44ADA deemed rate with income above the exemption limit, and an audit applies regardless of turnover.

The ₹10 crore digital relief, decoded

A business with turnover between ₹1 crore and ₹10 crore can avoid a tax audit — but only if it runs almost cashless. Both of these must hold true for the whole year:

Both conditions, together

✓Cash receipts are 5% or less of total receipts
✓Cash payments are 5% or less of total payments

Miss either test — even slightly — and the whole business drops back to the ₹1 crore limit. The 5% ratio is judged on the full year at audit time, so it pays to track it from April.

No auditTurnover ₹8.5 crore, only 2% in cash — under ₹10 crore and within the 5% test, so no audit.
Audit requiredTurnover ₹1.4 crore, regular cash business, not on presumptive — over ₹1 crore, so audit applies.

Presumptive schemes — when audit applies, when it doesn't

Presumptive taxation usually keeps you out of audit — but not always. The trigger is declaring less than the deemed rate while still earning above the exemption limit.

Audit IS triggered

  • 44AD business declaring below 6%/8% of turnover, with income above the exemption limit (44AB(e))
  • 44ADA professional declaring below 50% of receipts, with income above the exemption limit (44AB(d))
  • Opted out of 44AD within five years — books and audit due in those years if income exceeds exemption

No audit needed

  • 44AD business within ₹2 crore declaring at or above the deemed rate — even if turnover tops ₹1 crore
  • 44ADA professional within the limit declaring 50% or more
  • Accounts already audited under another law (e.g. a company) — just file the report in Form 3CA
A point people get wrong: the ₹75 lakh figure is the 44ADA presumptive ceiling (where 95%+ receipts are digital), not a raised audit threshold. The professional audit trigger stays at ₹50 lakh of gross receipts. More on the professional route ›

Forms, deadlines and the penalty

3CA / 3CB

Which audit form

Form 3CA + 3CD where your accounts are already audited under another law (such as a company under the Companies Act); Form 3CB + 3CD where they are not. Form 3CD carries the detailed particulars in both cases.

UDIN

Who can sign

Only a practising Chartered Accountant can conduct and sign the audit, with a valid UDIN. A tax audit cannot be signed by a firm or company — it must be an individual CA in practice.

DATES

Due dates

For AY 2026-27, the audit report is due by 30 September 2026 and the related ITR by 31 October 2026. Transfer-pricing cases (Form 3CEB) run a month later.

271B

If you miss it

A charge under Section 271B of 0.5% of turnover or gross receipts, capped at ₹1.5 lakh. No charge applies where there is a reasonable cause (Section 273B).

Need the audit done?

A practising CA, your report signed and filed in good time

Working out whether you're in audit is step one; the audit itself is a CA's job — books reconciled, Form 3CD prepared, the report signed with a valid UDIN and filed well before 30 September. We track your date from day one.

  • We confirm exactly which threshold or trigger applies to your case
  • Form 3CA/3CB and 3CD prepared, reviewed with you, and signed with UDIN
  • Filed ahead of the deadline — no Section 271B exposure
  • Fixed, turnover-based quote before any work begins
See tax audit pricing & book ›

Tax audit applicability — common questions

My turnover is ₹1.4 crore. Do I definitely need an audit?
On the regular route, yes — turnover above ₹1 crore triggers a tax audit. You'd avoid it only if you qualify for the ₹10 crore digital relief (cash within 5% of both receipts and payments), or if you are within ₹2 crore and declaring at the 44AD presumptive rate.
I'm a freelancer earning ₹60 lakh. Audit or not?
If you declare under 44ADA at 50% or more and stay within the ₹75 lakh presumptive ceiling, no audit. If you opt out and declare actual profit below 50% with income above the exemption limit, an audit applies — because your gross receipts also exceed the ₹50 lakh professional threshold.
Does a loss-making business need a tax audit?
It can. If your turnover crosses the limit, audit applies regardless of profit or loss. And if you are on a presumptive scheme but declare a loss (below the deemed rate) with total income above the exemption limit, the audit trigger applies too.
Can a salaried person face a tax audit?
Not on salary income. But if you also run a business or profession that crosses the 44AB limits, the audit applies to that activity. Your salary is reported in the same return alongside the audited business or professional income.
What happens if I miss the audit deadline?
A charge under Section 271B of 0.5% of turnover or gross receipts, capped at ₹1.5 lakh, plus the risk of a defective return and added scrutiny. Where there is a genuine reasonable cause, Section 273B can provide relief — but it is far safer to file by 30 September.

Keep reading

Tax Audit — CA servicePricing, process and a signed report with UDIN. ITR for Business44AD, ITR-3 vs ITR-4 and the audit interplay. ITR-4 (Sugam)The presumptive return and its limits. ITR for Freelancers44ADA, receipts and when audit bites.

Not sure if a tax audit applies to you?

Send your turnover or receipts on WhatsApp — a CA confirms whether you're in audit, and handles it end to end if you are. Fixed quote, filed before the deadline.

Check & book your tax audit ›

Disclaimer: This page explains tax audit applicability under Section 44AB of the Income-tax Act, 1961, for FY 2025-26 (AY 2026-27). It is general information, not tax, legal or financial advice, and does not create a professional relationship. Turnover and receipt limits, the digital-transaction conditions, presumptive triggers, audit forms, due dates and penalty provisions can change through the Finance Act, CBDT notifications or portal updates, and applicability depends on your specific facts. Please consult a qualified Chartered Accountant before acting on any information here.