The Central Board of Direct Taxes (CBDT) has extended the due date for filing the income tax audit report for the previous year (FY 2024-25) to October 31, 2025. Earlier, it was scheduled for September 30, 2025. This change in deadline will be beneficial for the assessees referred in explanation 2 (clause a) to section 139(subsection (1)) of the Income Tax Act. These assessees are required to furnish an audit report under the Act for the Financial year 2024-2025( Assessment year 2025-26)
The CBDT has decided to extend the deadline due to the concerns shared by many professional associations. Many taxpayers and practitioners faced difficulty in completing the audit report within the original timeline. Moreover, it was also said that certain floods and natural calamities that occurred during this time period have caused a negative impact on business operations. Regarding this, several representations from different tax practitioners and their arguments in the High Court have caught the attention of the CBDT; therefore, the CBDT has acknowledged these concerns and decided to extend the income tax audit report deadline by one month. This decision brings huge relief to taxpayers across the country.
Tax Audit Required Entities
Under the Income Tax Act, Section 44AB, it is stated that businesses having a turnover of more than 1 crore must undergo a tax audit. However, one thing to note is that this limit has been raised to 10 crore, if and only if the digital transactions in that business are at least 95%. This limit increase is a part of the government’s initiative to increase cashless transactions.
If your annual income exceeds 50 lakh, regardless of your profession, like a doctor, an architect, or any other private practice, you have to undergo a tax audit. Presumptive Taxpayers under Section 44AD & 44ADA are also not entirely exempt from tax audit. The reason behind this is that if they declare the profit below the prescribed rate, they may be required to undergo a tax audit.
Penalties and Tax Audit Forms
Chartered Accountants are required to submit certain forms, such as Form 3CA & 3CD, for entities that have already been audited under another law, such as the Companies Act. They also have to submit Form 3CB and 3CD for those not under any audit obligation. You must remember that forgetting deadlines can be costly for you. Specific penalties under Section 271B, up to 1.5 lakh Rupees or 0.5 per cent of total turnover, have to be remitted if you forget the audit deadline.
Conclusion
Most of the taxpayers are now relieved that the income tax audit report deadline has been extended. But don’t take it as an opportunity to stay obese and wait for the last moment. Remember, early filing is the better option to remain penalty-free. Avoid the last-minute rush and stay compliant. Be a responsible citizen and do your duty to the nation.
