The Income Tax Audit deadline for AY 2026-2027 is September 30, 2026. Income Tax audit is mandatory for certain taxpayers because it helps to provide complete and accurate information about income, tax deduction and tax payments of the specified entity. The law says that chartered accountants have to conduct this tax audit and the entity which is required to conduct this tax audit needs to prepare and maintain books of accounts.
Do you need to conduct an income tax audit even if opting for a presumptive taxation scheme?
Chartered Accountant Abhishek Soni says that an income tax audit under Section 44AB may still be required, even if you opt for presumptive taxation under Section 44AD or 44ADA. The reason: tax audit requirements also depend on your turnover or receipts and how much of it is received in cash.
Soni explains that the turnover limits for presumptive taxation increase when cash receipts are not more than 5% of total receipts:
Section 44AD (for business):
- Up to Rs 3 crore if cash receipts are ≤ 5%
- Up to Rs 2 crore if cash receipts are more than 5%
- Up to Rs 75 lakh if cash receipts are ≤ 5%
- Up to Rs 50 lakh if cash receipts are more than 5%
Soni says: “If your turnover or professional receipts exceed these limits, a tax audit under Section 44AB becomes applicable, even if you have opted for presumptive taxation.”
Also read: Tax Audit Report deadline: Who needs to upload it by September 30, 2026
Eight changes in Income Tax Audit forms for AY 2026-2027
The Form 3CD reporting requirements have been updated for AY 2026-27.
Key changes include updates to reporting on presumptive taxation, MSME payments, Section 43B, loans and deposits, and buyback receipts, along with the omission of certain clauses.
Here, Soni explains the changes:
1. Clause 12 includes Section 44BBC
Clause 12 has been amended to include Section 44BBC in the reporting of income taxable on a presumptive basis.
2. Clause 19 removes four deduction rows
References to Sections 32AC, 32AD, 35AC and 35CCB have been removed from Clause 19.
3. Clause 21 adds settlement expenditure reporting
Clause 21 now separately covers expenditure incurred on settling proceedings relating to a contravention under a law notified by the central government.
4. Clause 22 is revised for MSME payments
Clause 22 has been substantially revised to report interest inadmissible under Section 23 of the MSMED Act, amounts payable to micro or small enterprises under Section 15, amounts paid within the prescribed period, and amounts remaining unpaid and inadmissible.
5. Clause 26 is updated for Section 43B
Clause 26 has been revised to reflect the current Section 43B framework, including the specific reporting treatment for Section 43B(h) relating to payments to micro and small enterprises.
6. Clauses 28 and 29 omitted
Clauses 28 and 29 have been omitted from Income Tax Audit Form 3CD.
7. Clause 31 requires more detailed transaction reporting
Clause 31 now requires additional details on the nature and mode of relevant loans, deposits, specified advances and repayments, including the applicable transaction codes.
8. New Clause 36B for share buybacks
New Clause 36B requires reporting where the assessee receives an amount on the buyback of shares covered by Section 2(22)(f), including the amount received and the cost of acquisition.
