September 30 income tax audit deadline: Will it be extended? Here’s why professionals want more time

With the September 30 income tax audit deadline fast approaching, businesses and tax professionals are feeling the pressure. From tighter compliance requirements to technical glitches on filing portals, the workload has been piling up.

In response, several organisations, including the Bhilwara Tax Bar Association, various chambers of commerce, and the Institute of Chartered Accountants of India (ICAI), have appealed to the Finance Ministry to extend the deadline.

In fact, the ICAI officially requested a two-month extension on September 19. Tax professionals have also turned to social media platform X (formerly Twitter) to voice their concerns and rally support for a deadline extension.

CA Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Pvt. Ltd., highlights these concerns and shared his perspective on the need for a more pragmatic approach.

"So far this year, fewer than 10% of audits have been finished, visibly demonstrating compliance burden on corporates as well as professionals. Additional disclosures, reconciliations, and portal issues are overextending resources. Although timely filing is vital, hurrying through audits can lead to errors that may attract penalties subsequently," said CA Maurya.

Considering the duplication with other statutory returns and fewer effective working days, a pragmatic extension would offer breathing space, he further added.

What is a tax audit?

For instance, businesses must undergo a tax audit if their annual turnover exceeds ₹1 crore. However, this limit is increased to ₹10 crore if cash transactions make up less than 5% of total business transactions. For professionals, the audit becomes mandatory if their gross receipts cross ₹50 lakhs] in a financial year. There are also a few other situations where a tax audit might be required, depending on the nature of the business or specific tax provisions.

A tax audit is required if the sales, turnover, or gross receipts of a business exceed Rs 1 crore in the financial year or if the taxpayer opts for a presumptive taxation scheme under section 44AD or 44ADA of the Income Tax Act, 1961.

Failure to file a tax audit report under Section 44AB can lead to a penalty under Section 271B of the Income Tax Act. The penalty is calculated at 0.5% of your total sales, turnover, or gross receipts, with a maximum penalty of ₹1,50,000.