How-to · Tax
Tax audit under 44AB: the limits, and Form 26 from tax year 2026-27
When a tax audit is mandatory under section 44AB for AY 2026-27, the same rupee limits under section 63 of the Income-tax Act, 2025, and why this year still uses Form 3CA/3CB/3CD while tax year 2026-27 uses Form 26.
In this guide
A tax audit is mandatory when business turnover exceeds ₹1 crore, or ₹10 crore if cash receipts and cash payments each stay within 5 per cent, or when professional receipts exceed ₹50 lakh. Those limits continue under section 63 of the 2025 Act. AY 2026-27 still uses Form 3CA or 3CB with Form 3CD, due 30 September 2026. Tax year 2026-27 uses Form 26.
What the tax audit is testing
A tax audit is a chartered accountant's report that the books exist, that they can be reconciled to the return, and that the particulars the form asks for have been stated. It is not a Companies Act statutory audit and it is not a GST audit.
For FY 2025-26 the duty still sits in section 44AB of the 1961 Act. From tax year 2026-27 the same duty sits in section 63 of the Income-tax Act, 2025. The official forms FAQ says the rupee thresholds did not move.
The rupee limits
Section 44AB, and now section 63, turn on turnover or receipts, then on how much of that moved in cash.
| Who | Audit is mandatory when |
|---|---|
| Business, default | Total sales, turnover or gross receipts exceed ₹1 crore |
| Business, low-cash proviso | Turnover exceeds ₹10 crore, and cash receipts and cash payments each stay within 5 per cent of the relevant total |
| Profession | Gross receipts exceed ₹50 lakh |
Both legs of the cash test have to hold. Receipts in cash under 5 per cent with payments in cash above 5 per cent puts you back on the ₹1 crore line. Count the year you are reporting, not a trailing twelve months you invented for a board note.
The audit-report due date is a separate question. This page is only about whether the report is required.
When leaving presumptive taxation triggers it
The official FAQ lists a third class: people who opt out of presumptive taxation and declare income below the prescribed presumptive figure. That is the 44AD / 44ADA lock-in most firms already brief in March. The rupee test above is not the only door into a tax audit.
If you used the presumptive scheme last year and you are leaving it this year, read the lock-in in the Act for the year you are reporting. Do not take the answer from a 2023 working paper.
AY 2026-27 forms versus tax year 2026-27
The e-Filing forms FAQ is the cleanest official split we have:
| FY 2025-26 / AY 2026-27 | Tax year 2026-27 | |
|---|---|---|
| Governing Act | Income-tax Act, 1961, section 44AB | Income-tax Act, 2025, section 63 |
| Report | Form 3CA or 3CB, plus Form 3CD | Form 26 (the three old forms merged) |
| Usual due date | 30 September 2026 | 30 September 2027 |
Form 26 is a single structured report. The official FAQ says clauses were aligned with the ITR, disallowable expenditure sits in one consolidated disclosure, and the auditor's membership number, firm registration number and UDIN are mandatory. That is next year's problem. Do not file Form 26 for AY 2026-27.
Transfer-pricing cases still run on their own later date. If that is you, the due-date guide is the page to open next.
How to confirm on official pages
- Read the tax-audit answers on the official Income Tax Forms FAQ. That is where Form 26 and the 30 September dates are written down.
- For AY 2026-27, confirm section 44AB on the department's section page.
- For tax year 2026-27, read section 63 on Complied AI.
If a CBDT notification moves the September date, treat the notification as the date. The calendar page is not a promise.
Where Complied AI fits
The limits are in the Act. What still moves is the notified form, a utility change, or an extension of 30 September. CBDT updates on Complied AIkeep those documents next to the section so you do not file last year's pack on this year's due date.
Practical checks
Common questions
What is the tax audit turnover limit for AY 2026-27?
Business is audited if total sales, turnover or gross receipts exceed ₹1 crore. The limit becomes ₹10 crore if cash receipts and cash payments each do not exceed 5 per cent of the relevant total. A profession is audited if gross receipts exceed ₹50 lakh. The official e-Filing forms FAQ says these rupee limits continue under section 63 of the 2025 Act.
Which form do I use for the tax audit due on 30 September 2026?
Form 3CA if another law already audits the accounts, Form 3CB otherwise, plus Form 3CD in either case. That pack is for FY 2025-26 / AY 2026-27 under the 1961 Act. Form 26 is not for that year.
What is Form 26 in the Income-tax Rules, 2026?
Form 26 is the single tax-audit report for tax year 2026-27 onwards. It merges the old 3CA, 3CB and 3CD into one structured form. The official FAQ puts its first due date at 30 September 2027.
Did the Income-tax Act, 2025 raise the audit threshold?
No. Section 63 keeps the same rupee tests that sat in section 44AB: ₹1 crore / ₹10 crore for business, ₹50 lakh for profession, plus the presumptive opt-out cases. The change is the section number and the report form, not the limit.
Publication method
How this guide was prepared
This guide is published by the Complied AI research desk. Its source list and stated position were checked against the official records shown below on 15 August 2026.
Automation, including AI, may assist research, drafting and structure. It does not replace the official record or amount to an independent professional review. Read our editorial standards and corrections policy.
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