Tax audit & ITR form checker
Three questions that usually get answered wrong together: does a tax audit apply, can you use presumptive taxation, and which return do you file. They interact — presumptive taxation is the thing that switches the audit off, and the form follows from both.
Your position
How the three tests interact
The Income-tax Act 2025 came into force on 1 April 2026 and repealed the 1961 Act. Rates and thresholds carried over substantially unchanged, but every section was renumbered — 44AB is now section 63, 44AD, 44ADA and 44AE are all folded into section 58, and 234F-type consequences sit elsewhere again. The concept of an "assessment year" has gone; there is now a single "tax year". We label both the old and new references below because everyone still searches by the old numbers.
Audit thresholds — section 63 (formerly 44AB)
| Category | Threshold |
|---|---|
| Business | Turnover above ₹1 crore |
| Business, enhanced | ₹10 crore, where cash receipts and cash payments are each 5% or less |
| Profession | Gross receipts above ₹50 lakh |
| Presumptive shortfall | Profits declared below the deemed profit under section 58 |
The enhanced ₹10 crore limit needs both conditions — a business with 3% cash receipts but 9% cash payments stays on the ₹1 crore threshold.
Presumptive taxation — section 58 (formerly 44AD, 44ADA, 44AE)
| Head | Who can use it | Limit | Deemed profit |
|---|---|---|---|
| Small business | Resident individual, HUF or firm — not an LLP or company | ₹2 crore, or ₹3 crore if cash receipts ≤ 5% | 6% of digital receipts + 8% of the rest |
| Specified profession | Resident individual or firm — not a HUF, LLP or company | ₹50 lakh, or ₹75 lakh if cash receipts ≤ 5% | 50% of gross receipts |
| Goods carriage | Anyone, including companies and LLPs | Not more than 10 vehicles at any time | ₹1,000 per tonne per month for heavy vehicles above 12,000 kg; ₹7,500 per vehicle per month otherwise |
The unsettled point on tax audit
There is real tension in the new Act. Section 58(3) requires an audit only where the declared profit is lower than the deemed profit and total income exceeds the basic exemption — the old 44AD(5) formulation. But the table in section 63(1) appears, on its face, to have no basic-exemption safeguard and no requirement that the taxpayer ever opted into presumptive taxation at all. Read literally, any business within the scope of section 58(2) that declares below 6% or 8% is caught.
The practical effect, if that reading holds, is that small traders on genuinely thin margins of two to four per cent — who previously filed with books and no audit — are pushed into mandatory audit. There is no CBDT clarification yet. This tool applies the conservative reading and flags it rather than presenting a false certainty. If you are in that band, it is worth a conversation before you decide.
Due dates for tax year 2026-27
| Category | Due date |
|---|---|
| Salary, house property, capital gains | 31 July 2027 |
| Non-audit business or profession | 31 August 2027 |
| Tax audit report — Form 26 | 30 September 2027 |
| Audit cases | 31 October 2027 |
| Transfer pricing | 30 November 2027 |
| Belated return | 31 December 2027 |
| Revised return | 31 March 2028 |
| Updated return | 31 March 2032 |
The audit report is now Form 26, replacing 3CA, 3CB and 3CD, for tax years starting on or after 1 April 2026. FY 2026-27 is the first Form 26 year. The 2027 calendar dates follow from the statutory formula; the CBDT has extended filing dates in most recent years, so treat them as a baseline.
Common questions
What is the tax audit limit for FY 2026-27?
For a business it is ₹1 crore of turnover, rising to ₹10 crore where both cash receipts and cash payments are 5% or less of the respective totals. For a profession it is ₹50 lakh of gross receipts. These are unchanged by the Income-tax Act 2025, which renumbered section 44AB as section 63.
Do I need a tax audit if I use presumptive taxation?
If you declare the full presumptive amount — 6% or 8% of turnover under the small business head, or 50% of gross receipts for a profession — then no audit is required, whatever your turnover, so long as you stay within the presumptive limits. Declaring less than the presumptive amount is what triggers the audit.
What are the presumptive limits now?
For a small business, ₹2 crore of turnover, rising to ₹3 crore where cash receipts are 5% or less of total turnover. For a specified profession, ₹50 lakh of gross receipts, rising to ₹75 lakh on the same 5% cash test. Note that a cheque which is not account payee counts as cash for this test.
How is presumptive profit computed for a business?
It is now an explicit two-part addition, not a choice between two rates: 6% of the turnover received through banking or online modes, plus 8% of the remainder — or your actual profit, whichever is higher. A fully digital business is therefore taxed on 6%, and a fully cash business on 8%.
What is the five-year lock-in?
If you declare under the small business presumptive head and then fail to do so in any of the five following tax years, you are barred from the scheme for five years after that default — and if your total income exceeds the basic exemption in those years, books and audit become compulsory. The lock-in applies only to the business head, not to professions or goods carriages.
When is my return due?
For tax year 2026-27, salary and capital gains filers are due 31 July 2027, non-audit business and profession filers 31 August 2027, and audit cases 31 October 2027, with the audit report itself due 30 September 2027. These follow from the statutory formula in section 263; the CBDT has extended dates in most recent years, so treat them as the baseline rather than the final word.
Have a professional check this
Send us what the tool showed you. We will tell you what the position actually is, and what it would cost to deal with, before you commit to anything.
If an audit does apply
Tax audit engagements start at ₹19,999 and are performed by empanelled Chartered Accountants. Book early — the report is due a month before the return, and audit season compresses badly in September.
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