ITR Filing: Who Is Mandated To Get Their Accounts Audited And What's The Deadline?

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If the total sales, turnover, or gross receipts of a business exceed Rs 1 crore in a financial year, an audit is mandatory.
Filing the Income Tax Return (ITR) is mandatory for individuals and businesses when their earnings from all sources in a financial year exceed a certain limit. However, some taxpayers also need to get their accounts audited under the Income Tax Act, 1961, before filing their ITRs.
Let's take a look at important details about ITR filing for taxpayers who need their accounts to be audited.
Who Needs Tax Audit Before ITR Filing?
The audit requirement is based on income, turnover, or the nature of the business. Under Section 44AB of the Income Tax Act, 1961, businesses and professionals need their accounts to be audited under the following circumstances:
1. Businesses
· If the total sales, turnover, or gross receipts exceed Rs 1 crore in a financial year, an audit is mandatory.
· For businesses opting for the presumptive taxation scheme under Section 44AD, an audit is required if the declared income is lower than the presumptive rate (8% or 6% for digital receipts), and the total income exceeds the basic exemption limit.
Trusts and NGOs with total income exceeding the basic exemption limit (before claiming exemption under sections like 11 or 12) also need an audit.
What Is the Audit Deadline?
For the financial year 2024–25 (assessment year 2025–26):
· The due date to complete a tax audit is September 30.
· The deadline for filing the ITR after audit is October 31.
Why Is the Audit Important?
Tax audits ensure transparency, accuracy in financial reporting, and compliance with the Income Tax Act. Failing to get accounts audited when required can lead to penalties of 0.5 per cent of turnover, or up to Rs 1,50,000, whichever is lower.
If you run a high-turnover business, have professional receipts above the threshold, or opt out of presumptive schemes, check whether you need an audit. Meeting the audit deadline ensures smooth ITR filing. Missing the tax audit deadline may lead to an income tax notice and hefty penalties.
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