Section 44AB · Tax audit thresholds
Cross the line, get a CA to sign.
- Business turnover
- ₹1 cr (₹10 cr if 5% cash)
- Profession receipts
- ₹50 lakh
- Audit forms
- 3CA/3CB + 3CD
- AY 2026-27 audit — covered Table Sl. 2
- 21 October 2026
In plain English
Once your business turnover crosses ₹1 crore (₹10 crore if you're mostly cashless) or your professional receipts cross ₹50 lakh, the law makes a tax audit by a Chartered Accountant compulsory. For AY 2026-27, the tax-audit report deadline for taxpayers covered by Table Sl. 2 below Explanation 2 to section 139(1) is 21 October 2026 (previously 30 September 2026), under CBDT Circular No. 07/2026. Other taxpayer categories and Tax Year 2026-27 keep their own rules.
| Meaning | Number |
|---|---|
| Business turnover | ₹1 cr (₹10 cr if 5% cash) |
| Profession receipts | ₹50 lakh |
What this section covers
Section 44AB makes tax audit by a Chartered Accountant mandatory for: (a) businesses with turnover exceeding ₹1 crore — raised to ₹10 crore where aggregate cash receipts and cash payments each do not exceed 5% of total receipts and payments; (b) professionals with gross receipts exceeding ₹50 lakh; (c) presumptive taxpayers u/s 44AD/44ADA/44AE who declare lower income than the prescribed presumption and whose total income exceeds the basic exemption limit. For AY 2026-27, the tax-audit report deadline for taxpayers covered by Table Sl. 2 below Explanation 2 to section 139(1) is 21 October 2026 (previously 30 September 2026), under CBDT Circular No. 07/2026. Other taxpayer categories and Tax Year 2026-27 keep their own rules.
Read the legal text
“Every person,— (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds one crore rupees in any previous year… get his accounts of such previous year audited by an accountant before the specified date and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant…”
Old Act vs New Act
| Aspect | Act, 1961 | Act, 2025 |
|---|---|---|
| Section | 44AB | 63 |
| Topic | Tax audit thresholds | |
| Verdict | Renumbered as s.63 — covered AY 2026-27 audit deadline extended | |
| Notes | 44AB maps to Section 63. Circular 07/2026 grants a category-specific extension for AY 2026-27 under the 1961 Act; it does not change the Tax Year 2026-27 rules under the 2025 Act. Audit-threshold details were not re-reviewed in this deadline update. | |
Common confusion
The ₹10 crore turnover relief requires BOTH cash receipts and cash payments to be within 5% — failing either test brings the limit down to ₹1 crore. The 5% test is computed on the aggregate of each, not transaction-wise.
Who should know this
Related sections
Based on the official Income-tax Act, 1961 and the published Income-tax Act, 2025 as available on the Income Tax Department website. Always verify against the published Act and consult a qualified professional.
CBDT Circular No. 07/2026 — covered AY 2026-27 deadlinesChecked 2 Oct 2026
What was checked
44AB → 63: Mapping only. Income-tax Act, 2025 as amended by Finance Act, 2026 (consolidated PDF)
Related official updates