GST and Tax update

Schedule AL-2 – Detail of Assets and Liabilities of Start-ups ay 2026-27

CA Satbir Singh — Sun, 10 May 2026 08:13:55 +0000

Schedule AL-2 – Detail of Assets and Liabilities of Start-ups ay 2026-27

‘Schedule AL-2’ in the Income Tax Return (ITR) form applies to start-up companies that have filed a declaration in Form-2 under Para 5 of the DPIIT Notification GSR 127 (E) dated 19.02.2019. Such eligible start-ups must furnish a statement of assets and liabilities held from the date of incorporation up to the end of the relevant financial year. This schedule aims to enhance transparency regarding the financial holdings and transactions of start-up companies.

Schedule AL-2 requires disclosure of immovable properties acquired since incorporation, including both residential and non-residential properties, along with their addresses, costs, usages, and whether the properties have been transferred within the year. It also requires reporting of loans and advances made (if lending is not the company’s main business), with details such as the recipient’s PAN, amount, repayment status, interest charged, and closing balances.

Further, the schedule captures information on capital contributions to other entities and acquisition of shares or securities, specifying relevant details such as PAN, cost, date of acquisition, transfer status, and closing holdings. It also requires information on high-value movable assets like vehicles (cost exceeding Rs. 10 lakh), jewellery, artworks, and other valuable items acquired since incorporation, including usage and transfer details

Lastly, Schedule AL-2 includes a section on liabilities, capturing details of loans, deposits, and advances taken from persons other than financial institutions. Disclosures include lender’s PAN, opening and closing balances, amounts received or paid, interest debited, and applicable interest rates.

This schedule applies to ITR-6.

TAX AUDIT LIMITS AY 2026-27 with EXAMPLEs

CA Satbir Singh — Sun, 10 May 2026 08:02:52 +0000

TAX AUDIT LIMITS AY 2026-27 with EXAMPLE I

How Tax audit will be done for AY 2026-27 as the New income Tax Act 2025 is effective from 01st april 2026

The tax audit report for FY 2025-26 will be filed after 1st April, 2026. Which Act will govern the filing of the tax audit report for FY 2025-26 (AY2026-27)?
Ans. The audit report for FY 2025-26 relates to AY 2026-27 under the Income-tax Act, 1961. It must be filed in the prescribed form under the old Act (Form 3CA/3CB/3CD as applicable), even if the actual filing occurs after 01.04.2026. The due date for furnishing the tax audit report for AY 2026-27 is one month before the ITR due date, e.g., 30th September, 2026 for cases where the ITR due date is 31st October, 2026, and 31st October, 2026 for transfer pricing cases where the ITR due date is 30th November, 2026.

Which form should be used for the tax audit for FY 2025-26 (AY 2026-27)?
Ans. For FY 2025-26 (AY 2026-27), the tax audit report must be filed using the existing forms prescribed under the Income-tax Act, 1961 — Form 3CA (for persons audited under another law), Form 3CB (for all others), and Form 3CD (statement of particulars under section 44AB of the 1961 Act). The due date for filing the tax audit report for AY 2026-27 is 30th September, 2026.

TAX AUDIT LIMITS AY 2026-27

For Assessment Year (AY) 2026-27 (relating to Financial Year 2025-26), the turnover and gross receipt limits for mandatory tax audits under Section 44AB of the Income Tax Act remain as follows:

1. For Businesses

Basic Limit: A tax audit is mandatory if the total sales, turnover, or gross receipts exceed ₹1 Crore.
Enhanced Digital Limit: The total sales, turnover, or gross receipts exceed ₹10 Crore if:
- Cash receipts do not exceed 5% of total receipts.
- Cash payments do not exceed 5% of total payments.
Presumptive Taxation (Sec 44AD): If an eligible business opts for the presumptive scheme, the turnover limit for audit is ₹2 Crore. However, this limit increases to ₹3 Crore if cash receipts are ≤ 5% of total turnover. An audit is only required if the taxpayer declares profits lower than the prescribed rates (6% or 8%) and their total income exceeds the basic exemption limit.

2. For Professions

Basic Limit: A tax audit is mandatory if gross receipts from the profession exceed ₹50 Lakh.
Enhanced Digital Limit (Sec 44ADA): For specified professionals (like doctors, lawyers, CAs), the gross receipt limit for opting into presumptive taxation is ₹75 Lakh, provided cash receipts do not exceed 5% of total receipts.
Audit Trigger: If a professional declares profits lower than 50% of gross receipts and their total income exceeds the basic exemption limit, a tax audit becomes mandatory.

Key Deadlines & Compliance

Tax Audit Report Due Date: The audit report must be filed by 30th September 2026.
ITR Filing Due Date: For taxpayers subject to tax audit, the return filing deadline is 31st October 2026.
Penalty for Non-Compliance: Failure to get accounts audited can attract a penalty under Section 271B of 0.5% of turnover/gross receipts or ₹1,50,000, whichever is lower.
Audit Ceiling: From April 1, 2026, a Chartered Accountant can conduct a maximum of 60 tax audits per financial year.

Tax Audit Due to opting out of Section 44AD and 44ADA

Yes, an assessee can opt out of a tax audit in future years, but the rules differ significantly between businesses and professions due to specific “lock-in” provisions.

1. For Businesses (Section 44AD)

If you are currently under audit because your turnover exceeded the threshold (e.g., ₹1 Crore or ₹10 Crore), you can opt out of the audit in a future year by meeting the criteria for Presumptive Taxation.

The 5-Year Lock-in Rule: If you opt for the presumptive scheme (declaring 6%/8% profit), you must continue it for 5 consecutive years.
Consequence of Opting Out Early: If you opt out of the presumptive scheme before the 5-year period ends (by declaring a profit lower than 6%/8%), you are barred from re-entering the presumptive scheme for the next 5 assessment years.
Mandatory Audit During Barred Period: During those 5 “barred” years, a tax audit becomes mandatory for every year your total income exceeds the basic exemption limit, regardless of how low your turnover is.

2. For Professionals (Section 44ADA)

Professionals have more flexibility compared to businesses.

No 5-Year Restriction: Unlike Section 44AD for businesses, Section 44ADA for professionals does not have a mandatory 5-year lock-in period.
Switching Back and Forth: A professional can opt for presumptive taxation in one year (no audit) and switch to a regular audit (declaring lower profits) in the next year, then switch back to the presumptive scheme again the following year without being barred. [5, 10, 13, 14, 15]

3. Automatic Opt-Out via Digital Transactions

You can also “opt out” of a mandatory audit if you shift your business model to be primarily digital:

If your cash receipts and payments are 5% or less of your total transactions, your audit limit increases from ₹1 Crore to ₹10 Crore.
If your turnover stays below this ₹10 Crore limit in future years and you maintain the <5% cash ratio, you will no longer require a tax audit.

Summary Comparison

Feature	Business (Sec 44AD)	Profession (Sec 44ADA)
Lock-in Period	5 Consecutive Years	None
Re-entry Bar	5-Year Ban if opted out early	No Ban
Audit Trigger	Profits < 6%/8% OR Turnover > ₹10 Cr*	Profits < 50% OR Receipts > ₹75 L*

*Assuming digital transaction criteria (cash ≤ 5%) are met.

TAX AUDIT LIMITS AY 2026-27 EXAMPLE

For Assessment Year (AY) 2026-27, whether a tax audit is mandatory depends on the turnover, the mode of transaction (cash vs. digital), and whether the taxpayer opts for presumptive taxation.

1. Example for Business (Retail Trader)

Assume a retail trader, Mr. A, has different scenarios for his turnover in Financial Year 2025-26:

Scenario A (Audit Mandatory): His turnover is ₹1.5 Crores, and he does not opt for the presumptive taxation scheme (Sec 44AD). Since his turnover exceeds the ₹1 Crore basic limit, a tax audit is mandatory.
Scenario B (Audit Not Mandatory – Digital): His turnover is ₹8 Crores, but 98% of his receipts and payments are digital (NEFT/UPI/Cheque). Since cash transactions are below 5%, the audit limit is enhanced to ₹10 Crores, so no audit is required.
Scenario C (Presumptive Scheme): His turnover is ₹2.5 Crores, and 96% of his receipts are digital. He opts for Section 44AD and declares 6% profit. No audit is required because his turnover is within the enhanced ₹3 Crore limit for digital presumptive businesses.

2. Example for Profession (Interior Decorator)

Assume an interior decorator, Ms. B, has the following scenarios:

Scenario A (Audit Mandatory): Her gross receipts are ₹60 Lakhs. As a professional, if she does not opt for presumptive taxation, she must get an audit because her receipts exceed the ₹50 Lakh basic limit.
Scenario B (Audit Not Mandatory – Presumptive): Her gross receipts are ₹70 Lakhs, and all payments are via bank transfer. She opts for Section 44ADA and declares 50% of her receipts as profit. No audit is required because she is within the enhanced ₹75 Lakh limit for digital professional receipts.
Scenario C (Audit Triggered by Low Profit): Her gross receipts are ₹40 Lakhs (below the audit limit). However, she wants to declare only 20% profit (less than the 50% required by Sec 44ADA). Since her total income exceeds the basic exemption limit, she must undergo a tax audit to justify the lower profit.

Summary of Thresholds for AY 2026-27

Category	Basic Audit Limit	Enhanced Digital Limit	Presumptive Scheme Limit
Business	₹1 Crore	₹10 Crore (if cash Receipts and Payments ≤ 5%)	₹2 Crore (up to ₹3 Cr if digital)
Profession	₹50 Lakh	₹75 Lakh (if cash Receipts ≤ 5%)	₹50 Lakh (up to ₹75 Lakh if digital)

Meaning of Turnover for Tax Audit

The term “turnover” for the purpose of a tax audit under Section 44AB generally refers to the aggregate amount for which sales are effected or services are rendered by an enterprise. Since the Income Tax Act does not strictly define the term, it is interpreted using the Guidance Note on Tax Audit provided by the Institute of Chartered Accountants of India (ICAI).

What is Included in Turnover?

Gross Sales/Receipts: The total value of all goods sold or services provided during the year.
Sales of Scrap: Proceeds from the sale of manufacturing scrap, even if shown as “Miscellaneous Income” in the books.
Taxes (Inclusive Method): If you follow an “inclusive” method of accounting where sales prices include taxes like GST, those taxes are included in the turnover for the purpose of the audit limit. As per ICAI Guidance Note “The term ‘turnover’ for the purposes of this clause may be interpreted to mean the aggregate amount for which sales are effected or services rendered by an enterprise. If GST or any other tax is included in the sale price, no adjustment in respect thereof should be made for considering the quantum of turnover. Trade discounts can be deducted from sales but not the commission allowed to third parties. If, however, GST or any other indirect tax recovered are credited separately to GST or other tax account (being separate accounts) and payments to the authority are debited in the same account, they would not be included in the turnover. However, sales of scrap shown separately under the heading ‘miscellaneous income’ will have to be included in turnover.”
Stock-in-Trade Sales: Proceeds from selling shares, securities, or property if they are held as stock for business (not as personal investments).

What is Excluded from Turnover?

Trade Discounts: Discounts allowed on the sales invoice itself are deducted from the total sales.
Sales Returns: The value of goods returned by customers, even if they relate to sales from a previous year.
Sale of Fixed Assets: Money received from selling business assets (like machinery or furniture) is not part of turnover; it is treated as a Capital Gain/Loss.
Taxes (Exclusive Method): If GST or other taxes are credited to a separate account and paid directly to the government, they are generally excluded from the turnover calculation.

Specific Rules for Different Segments

For Professionals: The term used is “Gross Receipts,” which includes all fees received for professional services, including out-of-pocket expenses if they are not reimbursed on an actual cost basis.
For Share Traders:
- Delivery-based: The full sale value of the shares is considered turnover.
- Speculative (Intraday/F&O): The turnover is the sum of absolute profit and absolute loss (e.g., a profit of ₹50,000 and a loss of ₹40,000 equals a turnover of ₹90,000).
For Commission Agents: If the agent does not take ownership of the goods, only the commission earned is considered turnover, not the total value of the goods sold on behalf of the principal.

Is there any relaxation in tax audit for certain taxpayers or specific industries

For Assessment Year (AY) 2026-27, while tax audit rules are generally uniform, there are specific relaxations and exemptions available based on the nature of the entity and transaction methods. [1, 2]

1. Sector-Specific Relaxations

Certain industries have separate rules that either simplify or waive the standard audit requirements:

Non-Resident Shipping & Aircraft Business: Taxpayers operating under Section 44B (shipping) or Section 44BBA (aircraft) follow a presumptive scheme and are typically exempt from regular tax audit requirements unless they choose to declare lower than prescribed profits.
Transport Operators: Under Section 44AE, small truck owners (owning up to 10 vehicles) can opt for presumptive taxation. They only need an audit if they declare profits lower than the prescribed per-vehicle rates and their total income exceeds the taxable limit.
Cooperative Societies: If a society’s accounts are already audited under the Cooperative Societies Act, it does not need a separate set of books for income tax. It can submit its existing statutory audit report along with a simplified tax audit report (Form 3CA).

2. General Relaxations for All Industries

The most significant relaxation applies to any business transitioning to digital payments:

The 10-Crore Threshold: Any business can avoid a tax audit if its turnover is up to ₹10 Crore, provided that cash receipts and payments do not exceed 5% of total transactions.
MSME/Small Business Relief: For those opting for the presumptive scheme (Section 44AD), the turnover limit is relaxed to ₹3 Crore if cash receipts are ≤ 5% of total turnover.

3. Entities with Mandatory Audits (No Relaxation)

Some entities are required to undergo audits regardless of their turnover, often due to their legal constitution: [10]

Companies: Every company must undergo a statutory audit under the Companies Act 2013, regardless of its turnover or profit levels.
LLPs: An audit is mandatory if the turnover exceeds ₹40 Lakh or the partner’s contribution exceeds ₹25 Lakh.

4. Startups and Special Provisions

While startups do not have a specific “tax audit exemption” solely based on their status, many qualify for the ₹10 Crore digital relaxation since most tech-enabled startups operate primarily through non-cash modes.
Startups recognized by DPIIT may be eligible for other tax holidays (e.g., Section 80-IAC), but they must still comply with audit requirements to claim these deductions.

Due date for Tax audit and ITR filing for AY 2026-27

For Assessment Year (AY) 2026-27 (relating to Financial Year 2025-26), the following due dates apply for filing tax audit reports and Income Tax Returns (ITR):

1. Tax Audit Report (TAR) Due Dates

General Audit Cases: The deadline for a Chartered Accountant to furnish the tax audit report (Form 3CA/3CB and 3CD) is 30th September 2026.
Transfer Pricing Cases: For taxpayers required to furnish a report under Section 92E (international or specified domestic transactions), the deadline for the audit report is 31st October 2026.

2. Income Tax Return (ITR) Filing Due Dates in ca

The ITR deadline depends on the category of the taxpayer and whether an audit is required:

Taxpayer Category	ITR Due Date
Audit Required (u/s 44AB)	31st October 2026
Transfer Pricing Cases (u/s 92E)	30th November 2026
Non-Audit Businesses/Professionals (ITR-3 / ITR-4)	31st August 2026
Individuals/Salaried/Non-Audit (ITR-1 / ITR-2)	31st July 2026

3. Post-Deadline Filing

Belated Return: If you miss the original deadline, a belated return for AY 2026-27 can be filed up to 31st December 2026. This attracts late fees of ₹5,000 (reduced to ₹1,000 if total income is ≤ ₹5 Lakh).
Revised Return: To correct errors in the original return, a revised return can also be filed until 31st March 2027.
Updated Return (ITR-U): If both these deadlines are missed, you can file an updated return generally within 48 months from the end of the relevant assessment year, provided certain conditions are met.

Important Note: The tax audit report must be filed at least one month before the ITR filing due date for audited cases.

Penalty if no tax Audit done

For Assessment Year (AY) 2026-27, failure to get your accounts audited or failing to furnish the report by the specified deadline attracts a penalty under Section 271B of the Income Tax Act.

1. Quantum of Penalty

The Assessing Officer may direct the taxpayer to pay a sum equal to

0.5% of the total sales, turnover, or gross receipts.
₹1,50,000.
Whichever is lower is the maximum penalty leviable.

2. Updated Graded Fee Structure (Budget 2026 )

Under the Finance Act 2026, the penalty is being rationalised into a fixed fee structure to provide more certainty: ]

₹75,000 fee for any delay in filing the audit report up to 30 days.
₹1,50,000 fee if the delay exceeds 30 days.

The above amendments will take effect from the 1st day of April, 2026 and shall apply for tax year 2026-27 and subsequent tax years.. Thus it will not apply for AY 2026-27

3. Exceptions and “Reasonable Cause”

According to Section 273B, no penalty shall be imposed if the taxpayer can prove a reasonable cause for the failure. Common examples include:

Professional Issues: Resignation or death of the tax auditor.
Unforeseen Events: Natural disasters (floods, fire), civil unrest, or theft of account books.
Health: Serious illness of the taxpayer or the primary person in charge of accounts.
Other Matters: Delays caused by labor strikes or seizure of books by government authorities. [14, 15, 16, 17]

4. Other Consequences

Defective Return: If a mandatory tax audit report is not filed, the Income Tax Return (ITR) may be treated as defective under Section 139(9).
Loss of Benefits: You may lose the ability to carry forward certain business losses to future years.

Who Can Conduct a Tax Audit Under the Income Tax Act

Under Section 44AB of the Income Tax Act, 1961, only a practising Chartered Accountant (CA) is authorised to conduct a tax audit.

Eligibility Criteria

Qualifications: The auditor must be a “Chartered Accountant” as defined in the Chartered Accountants Act, 1949.
Certificate of Practice (COP): The CA must hold a valid, full-time Certificate of Practice.
Firm Structure: A firm of Chartered Accountants can also conduct the audit, in which case the report is signed by a partner in the firm’s name.

Who is Specifically Disqualified?

To ensure independence, certain individuals cannot be appointed as tax auditors, even if they are qualified CAs:

The Taxpayer: A person cannot audit their own accounts or those of a firm where they are a partner.
Internal Auditors: A person already serving as an internal auditor for the business cannot be its tax auditor.
Employees & Officers: Current employees or officers of the business are disqualified.
Indebted Persons: A CA indebted to the taxpayer for more than ₹10,000 cannot perform the audit.
Relative/Substantial Interest: Relatives of the taxpayer or persons with a substantial financial interest in the business are ineligible.

Can Other Professionals Conduct Tax Audits like CS or Cost Accountants?

Cost Accountants (CMA) & Company Secretaries (CS): No. While they can perform other types of audits (like cost or secretarial audits), the Income Tax Act specifically reserves tax audits for Chartered Accountants.

Audit Limits

A single Chartered Accountant can conduct a maximum of 60 tax audits per financial year.

What is Tax audit form that will be used by CA ?

A Chartered Accountant (CA) uses a combination of forms for a tax audit, depending on whether the taxpayer’s accounts are already audited under another law. For AY 2026-27, the CA will typically file one of two sets: 3CA-3CD or 3CB-3CD.

1. Choosing the Right Audit Report Form

The primary report form is selected based on your entity type:

Form 3CA: Used if your accounts are already audited under another law.Common for: Private or Public Limited Companies (audited under the Companies Act 2013) and LLPs.
Form 3CB: Used if your accounts are only audited for income tax purposes.
- Common for: Sole Proprietors and Partnership Firms that are not mandated for audit under any other legislation.

2. The Detailed Annexure (Form 3CD)

Regardless of whether 3CA or 3CB is used, it must be accompanied by Form 3CD.

Purpose: It is a 44-clause detailed statement of particulars.
What it covers:
- Part A (Clauses 1–8): Basic details like PAN, address, and the tax regime opted for.
- Part B (Clauses 9–44): Technical data including method of accounting, depreciation, payments to relatives, and compliance with TDS/GST rules.

3. Specialized Form (Form 3CE)

Form 3CE: This is specifically for non-residents or foreign companies who receive income in India through royalties or technical service fees.

Summary of Form Combinations

Scenario	Applicable Forms
Companies / LLPs	Form 3CA + Form 3CD
Individuals / Partnerships	Form 3CB + Form 3CD
Non-Residents (Royalty/FTS)	Form 3CE

Filing Process: Your CA will upload these forms using their Digital Signature Certificate (DSC) on the Income Tax e-Filing Portal. You must then “Accept” the uploaded report from your own login to complete the filing.

Can a taxpayer revise a tax audit report after filing?

Yes, a taxpayer can revise a tax audit report (Form 3CA/3CB and 3CD) after filing, but it is generally permitted only under specific, justifiable circumstances.

1. Mandatory Revision Grounds (Rule 6G)

According to Rule 6G(3) of the Income Tax Rules, a report must be revised if certain payments are made after the initial report was furnished that affect your tax liability. These include:

Section 40: Payments that necessitate recalculating disallowances, such as late payment of TDS.
Section 43B: Payments of statutory dues (like GST, PF, or bonuses) made before the ITR filing deadline but after the audit report was submitted.

2. Other Valid Grounds for Revision

The ICAI Guidance Note on Tax Audit also allows for revisions in certain non-routine cases to ensure accuracy:

Correction of Errors: Discovery of unintentional clerical mistakes, software glitches, or data entry errors in the original filing.
Revision of Financials: If the underlying books of accounts are reopened and revised (e.g., after an Annual General Meeting for companies).
Change in Law: Retrospective amendments in tax laws or new judicial interpretations that impact previous reporting.

3. Key Rules for the Process

Time Limit: The revised report must be furnished before the end of the relevant assessment year (e.g., by March 31, 2027, for AY 2026-27).
Who Can Revise: Only the original auditor who filed the first report is authorised to issue the revision. A new auditor cannot simply “revise” another CA’s report.
Documentation: The new report must explicitly state it is a revised version, reference the original report’s date, and provide a clear reason for the changes.
Fresh UDIN: The CA must generate a new UDIN (Unique Document Identification Number) for every revised report.

Note: Revising the audit report does not automatically update your Income Tax Return. You must separately file a Revised ITR (u/s 139(5)) to ensure your return matches the updated audit data.

Can a Chartered Accountant be penalized for incorrect tax audit reporting

Yes, a Chartered Accountant (CA) can be held personally liable and penalized for furnishing incorrect information in a tax audit report. The consequences range from monetary fines to the suspension of their license.

1. Monetary Penalty under Section 271J

If an Assessing Officer or Commissioner finds that a CA has furnished incorrect information in a report or certificate (like the Tax Audit Report), they can direct the CA to pay a penalty of ₹10,000 for each such report.

Scope: This penalty applies to each report individually, regardless of the number of errors within that specific report.
Defences: The penalty can be waived if the CA proves there was a “reasonable cause” for the error, such as a minor clerical mistake or a software glitch.

2. Professional Misconduct & ICAI Action

Beyond monetary fines, a CA may face disciplinary proceedings by the Institute of Chartered Accountants of India (ICAI) for “professional misconduct.” Common triggers include:

Gross Negligence: Failing to exercise due diligence or being negligent in conducting the audit.
Insufficient Information: Expressing an opinion without obtaining sufficient data to back it up.
Failure to Disclose: Knowingly failing to disclose a material fact in the financial statements or audit report.

Potential Sanctions from ICAI:

Reprimand: A formal warning.
Fines: Monetary penalties up to ₹1,00,000 or more depending on the severity.
Suspension/Removal: Temporary or permanent removal from the Register of Members, which revokes their right to practice.

3. Civil and Criminal Liability

In extreme cases where the incorrect reporting involves deliberate fraud or conspiracy with the taxpayer to evade tax:

Section 278: The CA can be prosecuted for abetment of tax evasion, which can lead to rigorous imprisonment and further fines.
Civil Suits: The taxpayer may also sue the CA for damages if the incorrect report led to significant financial losses or heavy penalties for the business.

Summary of Risks for CAs

Type of Liability	Authority	Common Penalty
Statutory Penalty	Income Tax Dept	₹10,000 per report (Sec 271J)
Disciplinary Action	ICAI	Reprimand, Fine, or License Suspension
Criminal Liability	Court of Law	Imprisonment for abetment (Sec 278)

What is ITR form to be filed in case of Tax Audit

For taxpayers who are required to get a tax audit done, the ITR forms for AY 2026-27 depend on the nature of your legal entity. Since you have a business or profession requiring an audit, you cannot use simplified forms like ITR-1 or ITR-4.

The applicable forms are:

1. ITR-3: For Individuals and HUFs

Who uses it: Sole proprietors, freelance professionals, or partners in a firm who have income from a business or profession that requires an audit.
Key Detail: This is the most comprehensive form for individuals and allows for the carry forward of business losses and claiming depreciation.

2. ITR-5: For Partnership Firms and LLPs

Who uses it: Partnership firms, Limited Liability Partnerships (LLPs), Association of Persons (AOPs), and Body of Individuals (BOIs).
Key Detail: If your firm’s turnover exceeds the audit limits, you must file ITR-5 after the CA has uploaded the Tax Audit Report.

3. ITR-6: For Companies

Who uses it: All companies (Private Limited, Public Limited, etc.) registered under the Companies Act, except those claiming exemption under Section 11 (charitable/religious trusts).
Key Detail: Since companies are mandatory to be audited under both the Companies Act and the Income Tax Act (Form 3CA-3CD), they must always use ITR-6.

Summary Table for Audited Cases

Entity Type	Applicable ITR Form	Audit Report Combo
Individual / HUF	ITR-3	Form 3CB + 3CD
Partnership Firm	ITR-5	Form 3CB + 3CD
LLP / Company	ITR-5 / ITR-6	Form 3CA + 3CD

Important Filing Rule

In all audited cases, the Tax Audit Report must be filed first (by September 30, 2026). Once the CA uploads the report and you “Accept” it on the portal, you can then proceed to file your ITR (by October 31, 2026). The ITR form will ask for the date of the audit report and the CA’s details (Membership Number and UDIN).

Commonly Asked Questions on Tax Audit in Income Tax

Here are the frequently asked questions related to tax audit under the Income Tax Act which are answered in above article

1. General Questions on Tax Audit

What is a tax audit under the Income Tax Act?
Who is required to get a tax audit done?
Under which section of the Income Tax Act is tax audit required?
What is the turnover limit for a tax audit?
What is the due date for furnishing the tax audit report?
What happens if a taxpayer fails to get a tax audit done?
Is tax audit applicable to professionals?
Is tax audit applicable to individuals and HUFs?
Are LLPs and partnership firms required to get a tax audit?
Are non-residents required to get a tax audit?

2. Questions on Turnover and Presumptive Taxation

How is turnover calculated for tax audit purposes?
Does the tax audit turnover limit include GST?
How is turnover calculated in case of derivatives trading, intraday trading, or F&O transactions?
What is the tax audit requirement for businesses under the presumptive taxation scheme?
What happens if a person under presumptive taxation declares lower income than the prescribed limit?

3. Questions on Tax Audit Reporting and Filing

Which forms are required for tax audit reporting?
What is Form 3CA, Form 3CB, and Form 3CD?
What are the key details required in a tax audit report?
How should the tax audit report be submitted?
Can a taxpayer revise a tax audit report after filing?

4. Questions on Penalty and Compliance

What is the penalty for failure to get a tax audit?
Can the penalty for non-compliance with tax audit be waived?
What if the tax audit is delayed beyond the due date?
Can a Chartered Accountant be penalized for incorrect tax audit reporting?
Is there any relaxation in tax audit for certain taxpayers or specific industries?

5. Miscellaneous Questions

Can an assessee opt out of tax audit in future years?
What is the role of a Chartered Accountant in a tax audit?
Can multiple tax audits be conducted by the same Chartered Accountant?
Are digital records and online transactions included in tax audit?
What are the key changes in tax audit provisions under the Income Tax Bill 2025?

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Part B – TI: Statement of Income for the Period ended on 31St March AY 2026-27

CA Satbir Singh — Sun, 10 May 2026 05:43:53 +0000

Part B – TI: Statement of Income for the Period ended on 31St March AY 2026-27

In ITR-2, ITR-3, ITR-5, and ITR-6, Schedule Part B – TI (Total Income) functions as a consolidated summary of the assessee’s total income for the financial year ending on 31st March. This schedule is auto-populated based on data entered in various other schedules such as Schedule HP (Income from House Property), BP (Business or Profession), CG (Capital Gains), OS (Other Sources), and others, depending on the nature of income reported.

Schedule Part B – TI in ITR-7 provides a consolidated computation of total income for entities such as trusts, institutions, political parties, and others claiming exemptions under various provisions like Sections 11, 12, 13A, 13B, or 10(23C). It auto-populates data from multiple schedules and captures voluntary contributions, income applied, accumulations, disallowances, and additions, including income taxable under special or maximum marginal rates. Based on the type of exemption claimed or violated, the relevant sub-part (B1, B2, or B3) becomes applicable, ensuring a complete and accurate reflection of gross total income for the financial year.

Note: While ITR-1 and ITR-4 do not contain separate schedules, the computation of gross total income is reflected directly in the ‘Part B – Gross Total Income’ section of the form.

Part B – TTI: Computation of Tax Liability on Total Income AY 2026-27

CA Satbir Singh — Sun, 10 May 2026 05:36:54 +0000

Part B – TTI: Computation of Tax Liability on Total Income AY 2026-27

‘Schedule Part B-TTI’ in the ITR form provides a consolidated detail of the calculation of total tax liability based on the income computed in Schedule Part B-TI. It includes tax on normal income, tax at special rates, surcharge, cess, rebates, and reliefs. It also takes into account interest, late filing fees, and tax credits. Finally, it compares the total tax liability with the taxes already paid to determine the amount payable or the refund due.

This schedule applies to ITR-2, ITR-3, ITR-5, ITR-6, and ITR-7. In contrast, ITR-1 and ITR-4 do not contain separate schedules; instead, the tax computation is reflected directly in the ‘Part D – Computation of Tax Payable’ section of the respective return forms.

Bank Account – Details of Bank Accounts AY 2026-27

CA Satbir Singh — Sun, 10 May 2026 05:33:40 +0000

Bank Account – Details of Bank Accounts AY 2026-27

This schedule requires the assessee to provide details of all bank accounts held in India at any time during the previous year, excluding dormant accounts. It is mandatory to report all active accounts, and at least one account must be selected for receiving any income tax refund, if applicable. For each bank account, the assessee must furnish the IFS code, bank name, account number, and account type. In cases where multiple bank accounts are selected for refund credit, the refund will be deposited into one of the validated accounts after processing.

Additionally, non-resident individuals who do not have a bank account in India may optionally provide the details of a foreign bank account (such as SWIFT code, IBAN, and bank name) for refund purposes. Further, residents must answer whether they held any foreign asset, had signing authority in a foreign account, or earned income from sources outside India during the year. If the answer is “Yes,” Schedule FA (Foreign Assets) must also be filed with the return.

This schedule applies to ITR-2 to ITR-7, with the required bank account details varying based on the specific ITR form. In the case of ITR-1, bank account information is furnished under the section titled “Part E – Other Information.”