Audit files are consolidated collections of documents that hold a company’s financial records, ensuring accuracy and compliance while keeping accounting standards and laws in mind.
In India, certain taxpayers under section 44AB of the Income Tax Act must have their accounts audited by a chartered accountant. Section 44AB states that a tax audit is mandatory for any business with a turnover or gross receipts exceeding 1,00,00,000 during the financial year. Still, if the cash transactions and payments do not exceed 5% or more of the total transactions, then the turnover threshold limit increases to 10,00,00,000. A tax audit for professionals, such as doctors, lawyers, architects, and advisors, is mandatory if the gross receipts are more than 50,00,000 during the financial year.
Typically, the due date for filing the audit report is 30th September. However, for the financial year 2024-25, the Central Board of Direct Taxes (CBDT) has extended its deadline to October 31, 2025, as per the Income Tax Act, 1961. There were various reasons highlighted for the extension, as called out by chartered accountants and professional associations.
Key concerns for the extension were: –
- In many regions, floods and other natural calamities disrupted business operations.
- Courts from different states requested and urged CBDT to push the dates, which CBDT approved.
- With the sudden load of tax and audit filings, professionals found it difficult to complete the audit filings within the original timeframe.
Even with the extension, taxpayers have reported occasional glitches on the Income Tax e-filing portal. The date extension was much required for the taxpayers, providing a temporary relief and enabling smoother compliance. However, taxpayers are encouraged to prepare in advance for future filings to avoid unwanted penalties.