Tax audit limit for AY 2026-27 and tax year 2026-27: turnover, cash, due dates and late filing

The tax audit limit for AY 2026-27 and tax year 2026-27

A business needs a tax audit, under s.44AB of the 1961 Act for FY 2025-26 (AY 2026-27) and s.63 of the Income-tax Act, 2025 for tax year 2026-27, where turnover exceeds ₹ 1,00,00,000, or ₹ 10,00,00,000 where cash receipts and cash payments are each within 5 percent. A profession needs one where gross receipts exceed ₹ 50,00,000, whatever its cash. For FY 2025-26 the calculator carries these figures across from s.63, and says so: confidence that a consolidation reproduces the figures is not verification.

For tax year 2026-27 an audited business outside transfer pricing must furnish the report by 30 September 2027, on Form No. 26, and a default costs a flat fee under s.428(c): ₹ 75,000 for a delay up to one month, ₹ 1,50,000 thereafter. For FY 2025-26 the calculator names Form 3CA or 3CB with 3CD from practice, computes no date and takes the one you enter, and puts the exposure at a s.271B penalty of 0.5 percent of turnover capped at ₹ 1,50,000, both editable fields.

The rule in plain words

The limit must be exceeded, so turnover of exactly ₹ 1,00,00,000 needs no audit. The ten crore limb needs both cash tests; one alone lifts nothing. Both run on everything the person received and paid, not activity by activity; business and professional receipts are tested against their own limits, and either crossing is enough.

A cheque or bank draft that is not account payee counts as cash on both sides, under s.44AB for FY 2025-26 and s.63(5)(b) for tax year 2026-27, where s.58(9) counts it for receipts only. A trader on ₹ 2,00,00,000 with ₹ 3,00,000 of cash receipts and ₹ 4,00,000 of cash payments out of ₹ 1,50,00,000 is on the ten crore limb and needs no audit; let ₹ 5,00,000 of his other payments go by cheques that are not account payee and he is on the one crore limb and needs one.

An empty payments box is not a passed test: the ten crore limb is a relief, so without a total payments figure the calculator keeps the limit at ₹ 1,00,00,000.

Turnover against the limit, with and without the cash test

Verdicts for a resident individual with one business or one profession in tax year 2026-27, total payments at 80 percent of turnover, on the three cash positions in the columns.

Exactly ₹ 10,00,00,000 with both tests met and exactly ₹ 50,00,000 need no audit either, and cash never moves the profession rows. FY 2025-26 gives the same verdicts, on limits carried across from s.63 and not verified in the 1961 text.

Where presumptive clients land

Four resident individuals inside the presumptive scheme's limits, run in both years with cash at 2 percent unless stated and the maximum amount not chargeable at the calculator's default input, ₹ 4,00,000.

Declaring at the presumptive figure switches the audit off in both years, though the FY 2025-26 proviso reaches s.44AD(1) and s.44ADA(1) only. For tax year 2026-27, declaring below it brings the audit under s.63(1), Sl. No. 2, which on the face of the text has no exemption limit condition, hence the last row, on ₹ 3,00,000 of total income; the calculator has not read the matching s.44AB limb for FY 2025-26.

What a late report costs in each year

One business at each turnover, cash at 8 percent on both sides so the audit is required, with the audit and the report both late: FY 2025-26 against a specified date entered as 30 September 2026, report furnished 15 December 2026; tax year 2026-27 against the computed 30 September 2027, report furnished 20 and 76 days late.

The s.271B column runs on the calculator's editable defaults; the Assessing Officer may impose it, s.273B gives a reasonable cause defence, and it does not step with the delay. The s.428(c) fee is flat and mandatory, with no such defence: the one month ends on 30 October 2027 and there is no third step.

Conditions and edge cases a CA gets asked about

A company is audited under the Companies Act, 2013 whatever its turnover, so it is always on the audited due date and files Form No. 26 Part A. An LLP cannot switch the audit off on the business or profession rows, which s.58(11) closes to it; only the goods carriage row stays open. A co-operative society faces the same limits; its question is timing, since another law's audit satisfies s.63(4) only if completed before the specified date with its report furnished by then.

A goods carriage client at the s.44AE figure gets no FY 2025-26 relief from the proviso, and because s.44AE(7) was not read the calculator counts those receipts that year, erring towards an audit; for tax year 2026-27, s.58(10) takes a business of not more than ten goods carriages outside the limits. The five year bar is a trigger of its own, under s.58(8), where total income exceeds the maximum amount not chargeable.

Exchange traded futures and options through a SEBI registered intermediary with a time stamped contract note are a non speculative business and intraday equity a speculative one, but neither has a settled turnover: the 2025 Act and the 2026 Rules define none, and the ICAI Guidance Note has no statutory force and changed its own position between its 2014 and 2022 editions.

What changes for tax year 2026-27 under the 2025 Act

The Income-tax Act, 2025 commences on 1 April 2026 and replaces the previous year and the assessment year with one tax year, and s.44AB becomes s.63.

The Finance Act, 2026 s.66(a) substituted the return due dates in s.263(1)(c): 31 October 2027 where the accounts are audited under any law, 31 August 2027 for a business or profession not required to be audited, and 30 November 2027 where transfer pricing under s.172 applies. The report is due by the specified date under s.63(5)(a), one month prior: 30 September 2027 on the audited row. On the transfer pricing row the two readings of one month part company, 31 October 2027 and 30 October 2027; the section does not choose, and the calculator reports the first with the second beside it.

The report goes on Form No. 26 under rule 47 of the Income-tax Rules, 2026: Part A where another law audits the person, Part B where not, and the particulars in Parts C and D, the old 3CA, 3CB and 3CD. Rule 47(3) allows a revision before 31 March 2028 on one ground, a payment after the report that needs the s.35 or s.37 disallowance recalculated.

From 1 April 2026 the Finance Act, 2026 moved the audit default into s.428(c) as a fee, by s.96, and replaced the old penalty in s.446, by s.101, so the 0.5 percent penalty never applied under the 2025 Act. s.470 saves penalties and does not name s.428, so no reasonable cause defence reaches the fee.

Three things about the fee are not established, and the calculator leaves them open: the date the one month delay runs from, which it anchors on the specified date and lets you move; the effect of the change from "or" to "and", which read literally spares a client audited on time whose report alone is late; and whether the fee can be raised in an intimation at all, and so whether there is any appeal.

What the calculator does

The calculator takes the year, the person, each activity and the cash figures, and returns the verdict with its triggers, the limb, the form, the tax year 2026-27 dates and the cost of a late report. Where a blank answer would buy a relief, it withholds the relief and names the question, and where a trigger cannot be settled it answers cannot determine. It leaves to the CA the turnover of a derivatives or speculative business, the FY 2025-26 specified date, the maximum amount not chargeable and the open readings of s.428(c).