Tax Audit Limits at a Glance
| Category | When tax audit generally applies |
|---|---|
| Business - normal rule | Total sales, turnover or gross receipts exceed ₹1 crore in the tax year. |
| Business - low-cash transactions | Threshold becomes ₹10 crore where cash receipts do not exceed 5% of total receipts and cash payments do not exceed 5% of total payments. |
| Profession | Gross receipts from profession exceed ₹50 lakh. |
| Specified presumptive cases | Audit can apply where the taxpayer declares income below the deemed income or otherwise falls within the statutory audit conditions relating to presumptive taxation. |
Tax Audit for Business: ₹1 Crore or ₹10 Crore?
Section 63 provides a general tax-audit threshold of ₹1 crore for a person carrying on business. Where the statutory low-cash conditions are satisfied, the ₹1 crore threshold is substituted by ₹10 crore.
For the ₹10 crore threshold to apply, both tests must be satisfied:
- aggregate amounts received in cash, including cash sales, turnover or gross receipts, must not exceed 5% of total receipts; and
- aggregate payments made in cash, including cash expenditure, must not exceed 5% of total payments.
Tax Audit for Professionals: ₹50 Lakh
A person carrying on profession is generally required to get the accounts audited where gross receipts from the profession exceed ₹50 lakh during the tax year.
This tax-audit threshold is different from the higher eligibility ceiling available in specified circumstances under presumptive taxation. The two limits should not be treated as interchangeable.
Presumptive Taxation and Tax Audit
The Income-tax Act, 2025 consolidates important presumptive-taxation provisions in Section 58. For an eligible business, the turnover ceiling is ordinarily ₹2 crore and can extend to ₹3 crore where cash receipts do not exceed 5% of total turnover or gross receipts. For a specified profession, the gross-receipts ceiling is ordinarily ₹50 lakh and can extend to ₹75 lakh where the prescribed cash-receipt condition is satisfied.
Tax audit can nevertheless become mandatory in specified presumptive cases where the taxpayer claims profits lower than the deemed amount or where other statutory conditions, including the rules concerning opting out of a presumptive scheme, are triggered.
Tax Audit Forms: Form 26 from Tax Year 2026-27
Rule 47 of the Income-tax Rules, 2026 prescribes Form No. 26 for tax audits under Section 63. Form 26 applies to tax years commencing on or after 1 April 2026 and consolidates the earlier Forms 3CA, 3CB and 3CD.
| Period | Provision | Tax-audit report |
|---|---|---|
| FY 2025-26 / AY 2026-27 | Section 44AB, Income-tax Act, 1961 | Form 3CA or Form 3CB, together with Form 3CD |
| Tax Year 2026-27 onwards | Section 63, Income-tax Act, 2025 | Unified Form No. 26 under Rule 47 |
How Form 26 Works
Under Rule 47, Part A applies where accounts are already required to be audited under another law, while Part B applies to other tax-audit cases. The prescribed particulars are furnished through Parts C and D. CBDT states that the unified form is intended to replace the earlier 3CA/3CB/3CD structure for the new Act.
Tax Audit Report Due Date
Section 63 defines the “specified date” as the date one month before the due date for furnishing the return of income under Section 263(1).
| Tax period | Audit form | CBDT-stated audit due date |
|---|---|---|
| FY 2025-26 / AY 2026-27 | Forms 3CA/3CB + 3CD | 30 September 2026 |
| Tax Year 2026-27 | Form No. 26 | 30 September 2027 |
These dates should always be checked for any subsequent statutory extension, notification or court order applicable to the particular filing year.
Where Accounts Are Already Audited under Another Law
If a person is required under another law to have the accounts audited, Section 63 does not require duplication of the underlying audit. Compliance is achieved by completing the audit under that other law before the specified date and furnishing the prescribed tax-audit report and particulars by that date.
Who Should Check Tax-Audit Applicability?
Tax-audit applicability should be examined where a taxpayer has business turnover above ₹1 crore, professional receipts above ₹50 lakh, turnover between ₹1 crore and ₹10 crore with significant cash transactions, or falls within specified presumptive-taxation cases. The analysis should consider turnover or gross receipts, the exact cash-receipt and cash-payment percentages, the presumptive-taxation history and the income actually declared.
Official References
Income Tax Department - Income-tax Act, 2025 and Rules, 2026
Income-tax Act, 2025 as amended by Finance Act, 2026
Income Tax Department - Rule 47: Audit Report under Section 63
Income Tax Department - Form No. 26 FAQs
CBDT - FAQs on Interplay and Transition
Frequently Asked Questions
What is the tax audit turnover limit for business in 2026-27?
Under Section 63, the general threshold is ₹1 crore. It becomes ₹10 crore where both the cash-receipt and cash-payment conditions do not exceed 5%.
What is the tax audit threshold for professionals?
The gross-receipts threshold is ₹50 lakh.
Is the ₹10 crore limit available if only cash receipts are within 5%?
No. Both cash receipts and cash payments must satisfy their respective 5% conditions.
What form is used for tax audit under the Income-tax Act, 2025?
Form No. 26 under Rule 47 applies from Tax Year 2026-27 onwards.
Which forms apply to FY 2025-26?
FY 2025-26 / AY 2026-27 remains under the 1961 Act and uses Form 3CA or 3CB together with Form 3CD.
What is the audit-report due date for Tax Year 2026-27?
CBDT's transition FAQ states that Form No. 26 for Tax Year 2026-27 is due on 30 September 2027.