Overview
A tax audit is an audit of a taxpayer's books of account by a Chartered Accountant, required under income-tax law when business turnover or professional receipts exceed prescribed limits. The auditor reports prescribed particulars in the tax audit report, which the tax department uses in processing and assessment.
Many other laws and institutions also require certificates from a Chartered Accountant: banks, SEBI, RBI, government departments and foreign remittance rules. Certificates are issued in line with the ICAI Guidance Note on Reports or Certificates for Special Purposes.
Who needs this service
Legal and regulatory framework
- Income-tax Act, 2025 (from Tax Year 2026-27) and Income-tax Act, 1961 for earlier years: tax audit provisions and prescribed forms
- ICAI Guidance Note on Tax Audit
- ICAI Guidance Note on Reports or Certificates for Special Purposes
- FEMA and RBI rules for remittance certificates (Form 15CB)
Scope of services
Tax audit
- Verification of books of account and supporting records
- Reporting of particulars in the prescribed tax audit report (Forms 3CA/3CB and 3CD under the 1961 Act, and the corresponding forms under the 2025 Act)
- Review of disallowances, TDS compliance, depreciation, loans and related party payments
- Upload of the report on the income-tax portal
Certifications
- Net worth and turnover certificates
- Utilisation of funds certificates for banks and grants
- Form 15CB for foreign remittances
- Certificates under SEBI, RBI and other regulations
- Certificates for tenders and government departments
How the engagement works
- Data collectionBooks of account, reconciliations and schedules required for the tax audit report.
- VerificationExamination of records against each clause of the report.
- DiscussionClarification of observations and qualifications with management.
- Reporting and uploadFinalisation, digital signing and upload; the taxpayer approves it on the portal.
Documents typically required
Key forms and due dates
| Item | Timeline |
|---|---|
| Tax audit report | 30 September of the year following the financial year (subject to extensions) |
| Income tax return for audit cases | 31 October |
| Form 15CB | Before the remittance is made |
Deliverables
- Tax audit report uploaded on the income-tax portal
- Certificates on the firm's letterhead with UDIN
The scope of each engagement is agreed in writing and depends on the nature, size and regulatory requirements of the entity.
Frequently asked questions
What is UDIN?
The Unique Document Identification Number generated on the ICAI portal for every certificate and report signed by a Chartered Accountant, so that third parties can verify it.
What happens if a tax audit is not done?
A penalty may be levied under income-tax law, and the return may be treated as defective.
Is a tax audit different from a statutory audit?
Yes. A company may need both. The statutory audit covers the financial statements; the tax audit reports specific tax-related particulars.
Does the new Income-tax Act, 2025 change tax audit?
The requirement continues under the 2025 Act with updated section and form references. Audits for FY 2025-26 and earlier follow the 1961 Act.