Income tax audit report: Don’t miss the October 31 deadline

As the October 31, 2025, deadline for filing income tax audit reports approaches, businesses and professionals across India are racing to complete their audits and comply with the Income Tax Department’s requirements.

"October 31, 2025, is the due date for submitting the income tax audit report for FY 2024-25. Failure to meet the date will result in penalties under Section 271B, which could be very heavy, particularly in the case of companies with turnover that is more.," said CA Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara Pvt. Ltd.

Firms and accountants must prioritise completing the audit on time, checking all postings, and keeping communication open with auditors, added CA Maurya.

The audit, mandated under Section 44AB of the Income-tax Act, is crucial for taxpayers whose turnover or receipts exceed specified limits.

"Keeping in view the representation of the tax practitioners and their submissions before the Honourable Courts, the 'specified date' for furnishing of the report of audit under any provision of the Income-tax Act, 1961, for the Previous Year 2024- 25 (Assessment Year 2025-26), in the case of assessees referred to in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act is extended from 30th September, 2025 to 31st October, 2025," read CBDT's notification.

What is a tax audit?

Who is required to get the account audited?

As per Section 44AB of the Income-tax Act, 1961, certain individuals and entities are mandatorily required to get their accounts audited by a Chartered Accountant. The key categories are as follows:

• Businesses

An individual or entity carrying on a business is required to get a tax audit done if the total sales, turnover, or gross receipts exceed ₹1 crore in a financial year.

Exception: This requirement does not apply if the taxpayer has opted for the presumptive taxation scheme under Section 44AD, and their total turnover or sales are less than ₹2 crore.

Enhanced Threshold (₹10 crore): The limit of ₹1 crore is increased to ₹10 crore if:

Cash receipts and cash payments during the year do not exceed 5% of the total receipts and payments, respectively. In other words, at least 95% of the transactions must be conducted through banking or digital channels.

• Professionals

An individual carrying on a profession is required to undergo a tax audit if their gross receipts exceed ₹50 lakhs in a financial year.

What is the penalty for not getting accounts audited?

If you fail to get your accounts audited on time, you may face a penalty of 0.5% of your total turnover or gross receipts, capped at ₹1.5 lakh. Missing the audit deadline could thus cost you up to ₹1.5 lakh, another reason to file well before the due date.