AY 2026-27 (FY 2025-26) – INCOME-TAX ACT 1961
Answer a few questions and know exactly whether tax audit under section 44AB applies to you this year – which limb, which form, the due date and the documents to keep ready.
Handles what article-style pages skip: the Rs 10 crore digital-turnover relief, the section 44AD five-year lock-in, the Rs 75 lakh professional limit, F and O turnover computation, multiple businesses and presumptive opt-outs.
Tax Audit Applicability Checker (Section 44AB)
Matters for the 44AB(d)/(e) limbs (presumptive opt-out cases). For firms/companies any income is above the limit – select Yes.
What activities do you have?
The five limbs of section 44AB at a glance
| Limb | Who it catches | Threshold / trigger |
|---|---|---|
| 44AB(a) | Business | Turnover above Rs 1 crore – raised to Rs 10 crore where BOTH cash receipts and cash payments are 5% or less (non-account-payee cheques count as cash) |
| 44AB(b) | Profession | Gross receipts above Rs 50 lakh (relief: no audit if validly declaring under 44ADA – limit Rs 75 lakh with 95%+ digital receipts) |
| 44AB(c) | 44AE / 44BB / 44BBB cases | Claiming lower than the deemed profit |
| 44AB(d) | 44ADA professionals | Declaring below 50% AND total income above the basic exemption |
| 44AB(e) | 44AD(4) lock-in cases | Exited 44AD within 5 years AND total income above the basic exemption – audit applies irrespective of turnover |
Also exempt despite crossing limits: anyone validly declaring under 44AD(1) (turnover up to Rs 2 crore, or Rs 3 crore with 95%+ digital receipts) or 44ADA(1); non-residents taxed under 44B/44BBA; and the 44AE goods-carriage business is kept out of these limits altogether.
Frequently Asked Questions
What is the tax audit limit for AY 2026-27?
Rs 1 crore turnover for business – raised to Rs 10 crore where both cash receipts and cash payments are 5% or less of the totals – and Rs 50 lakh gross receipts for a specified profession. The thresholds are unchanged from last year; the audit report is due by 30 September 2026 and the ITR by 31 October 2026.
Is tax audit required for F&O trading?
Only if section 44AB triggers. F&O turnover is the sum of absolute profits and losses – not contract value – and since broker-settled trades are fully digital, the Rs 10 crore limit usually applies, not Rs 1 crore. Most retail traders are well below it. A loss by itself does NOT force an audit.
Does a business loss mean compulsory audit?
No. Audit depends on the 44AB limbs, not on profit or loss. The confusion comes from 44AD(4)/44AB(e): if you had opted for 44AD earlier, exited it within five years, and your total income exceeds the basic exemption, audit applies – that is the exit lock, not the loss itself.
Can I avoid audit by opting for presumptive taxation?
Often, yes. A business declaring 8%/6% under 44AD (turnover up to Rs 2/3 crore) or a professional declaring 50% under 44ADA (receipts up to Rs 50/75 lakh) is outside 44AB entirely. But once you use 44AD, exiting within five years locks you out and can trigger audit under 44AB(e).
Which form applies – 3CA or 3CB?
Form 3CA (with 3CD) where the accounts are already audited under another law – companies, and others with statutory audits. Form 3CB (with 3CD) for everyone else. Both need UDIN, and the UDIN must be updated on the e-filing portal within 60 days of uploading the report.
What changed in Form 3CD this year?
The form applicable for AY 2026-27 carries the changes notified from 1 April 2025: a rewritten MSME clause 22 (section 43B(h) split), a new clause 36B for share buyback receipts, deletion of the old clauses 28 and 29, and code-based reporting of loan/deposit modes in clause 31.