Income Tax Audit 2025: Deadline To Penalty—Here's What Taxpayers Must Note

The deadline to submit Income Tax Audits for the financial year 2024-25 is Sept. 30. This comes weeks after the due date to file income tax return (ITR) for most salaried individuals, Hindu Undivided Family (HUFs), and other entities. Taxpayers whose accounts require the official audits have been asked to file their income tax returns by Oct. 31 for FY25.

This includes companies, proprietorships and partners in firms. Prior to this, they are required to submit the audit report by Sept. 30 to proceed further. For now, this remains the deadline as the Income Tax Department is yet to announce any extension to the due date to file the tax audit.

According to the Income Tax Department, the law requires taxpayers to get the audit of the accounts of their business or profession. In simple terms, it is a financial check-up, wherein financial records of a professional or business are examined to ensure compliance with the Income Tax Act.

Under this, a review is conduced to confirm that taxes have been calculated correctly and various aspects like income, expenses and deductions have been recorded in a proper manner.

Ensuring income tax compliance, the tax audit is required for taxpayers based on their income and turnover. Under Section 44AB, provisions related to the class of taxpayers who are required to get their accounts audited from a chartered accountant have been mentioned. 

Tax audit is not applied to all the taxpayers. Usually, people having their business turnover or gross receipts exceed Rs 1 crore in a financial year must undergo a tax audit. Also, the limit is at Rs 10 crore in cases where cash dealings account for less than 5% of total transactions.

For professionals, if their gross receipts are more than Rs 50 lakh in a year, then a tax audit is required. Also, taxpayers are required to get their accounts audited under other specific circumstances given by CBDT as well.

Missing the tax audit deadline results in a penalty, as mentioned in Section 271B of the Income Tax Act. The penalty is 0.5% of the total sales, turnover, or gross receipts. It has a cap of Rs 1,50,000. According to the Central Board of Direct Taxes (CBDT), a relief is provided if taxpayers are able to provide a valid reason for the delay in filing tax audit.