Tax Audit Date Extension : With the September 30 income tax audit deadline fast approaching, businesses and tax professionals are feeling increasing pressure. Tightening compliance requirements, additional disclosures, and technical glitches on filing portals have significantly added to the workload.
In response, several organizations—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 for an extension.
On September 19, the ICAI officially requested a two-month extension to provide relief to taxpayers.
Tax professionals have also voiced concerns on social media platform X (formerly Twitter), rallying support for the extension.
CA Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Pvt. Ltd., highlighted the need for a more pragmatic approach.
“So far this year, fewer than 10% of audits have been finished, visibly demonstrating the 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. Considering the duplication with other statutory returns and fewer effective working days, a pragmatic extension would offer breathing space,” said CA Maurya.
What is a Tax Audit?
A tax audit is a detailed review of a business or professional’s financial records to ensure compliance with the Income Tax Act. It verifies that income, expenses, and deductions are properly reported and that tax calculations are accurate.
The audit is mandatory for:
- Businesses with annual turnover exceeding ₹1 crore (or ₹10 crore if cash transactions are under 5% of total transactions).
- Professionals with gross receipts exceeding ₹50 lakh.
- Taxpayers opting for presumptive taxation schemes under Sections 44AD or 44ADA.
Penalties for Non-Filing
If failed to file a tax audit report under Section 44AB can attract penalties under Section 271B. The penalty will be 0.5% of total sales, turnover, or gross receipts, with a maximum of ₹1,50,000.
What This Extension Means
If approved, the extension would give businesses and tax professionals additional time to complete audits without rushing, reducing errors and avoiding penalties.
The Finance Ministry has not yet officially announced the revised deadline, but stakeholders are hopeful for relief.
Tax experts urge businesses to stay informed about official notifications and coordinate closely with their Chartered Accountants to ensure compliance within the extended timeline.