What this covers
A tax audit is the audit of a taxpayer's books of account required by section 63 of the Income-tax Act, 2025, reported to the Income Tax Department in Form 26. It is an audit of tax particulars — not an audit of the financial statements, which the Companies Act, 2013 deals with separately. From tax year 2026-27 the three familiar forms are consolidated into one: Form 26 carries the statement of particulars in Parts A and B (formerly Form 3CD), with Part C where the accounts are already audited under another law (formerly Form 3CA) and Part D where they are not (formerly Form 3CB).
Statutory basis
Section 63 of the Income-tax Act, 2025, read with Rule 47 of the Income-tax Rules, 2026. The Act came into force on 1 April 2026 and repealed the Income-tax Act, 1961; the corresponding provision under the old Act was section 44AB, reported in Form 3CA or 3CB with Form 3CD under Rule 6G of the 1962 Rules. An audit for a period up to 31 March 2026 is still governed by the old Act and the old forms.
Who it applies to
Broadly: a business whose turnover exceeds the threshold in section 63, a profession whose gross receipts exceed the prescribed limit, and a taxpayer who has opted out of presumptive taxation within the lock-in period. The thresholds differ according to the proportion of receipts and payments made otherwise than in cash, and they have been amended more than once. We confirm applicability for your tax year before starting rather than working from last year's figure — particularly for tax year 2026-27, the first year under the new Act.
What we do
- 1Confirm whether section 63 applies to you for the relevant tax year, and on which limb — and whether the year in question falls under the 2025 Act or the 1961 Act.
- 2Review the books, ledgers and reconciliations, raising queries as they arise rather than at the end.
- 3Verify the particulars Form 26 calls for — depreciation, disallowances, payments allowed only on actual payment, TDS and TCS compliance, loans and deposits, related-party transactions and the clause-wise disclosures.
- 4Reconcile turnover and tax positions against the GST returns filed for the same period, which is where most inconsistencies surface.
- 5Discuss every proposed observation or qualification with you before it is reported.
- 6File the report with the Income Tax Department and confirm your acceptance on the portal.
What you receive
- Report filed
- Form 26, with the Part applicable to your case, filed and acknowledged.
- Working papers
- The file supporting each clause, retained and shared.
- Written note
- A note on any observation reported, so the position is on record if it is queried later.
Documents and information required
Trial balance and final accounts for the year · ledgers and bank statements · fixed-asset register with additions and disposals · GST returns for the period · TDS and TCS returns and challans · stock statements · loan confirmations and interest certificates · related-party details · last year's tax audit report and computation.
Key dates
The report is ordinarily due one month before the due date for the return of income for taxpayers to whom section 63 applies. Both dates have been extended by CBDT notification in several recent years, and the first year under the new Act and the new form is a year in which we would not assume the ordinary date holds — we confirm the operative date for your tax year.