An engagement letter format for ITR filing and compilation work – the letter most practices skip, and the one that protects them most. Drafted on SRS 4410 (Revised) principles: you compile the financial information and prepare the return from what the client provides, you do not audit or verify it, and you express no opinion. The client owns the accuracy and completeness of the information, reconciles with Form 26AS and AIS, reviews the draft and e-verifies the return. Copy it below or open it in the generator for a Word download.
Engagement letter format – ITR filing / compilation (AY 2026-27)
Chartered Accountants
[Firm address]
[The Board of Directors]
[Client name]
[Client address]
Dear Sir / Madam,
This letter records the terms on which we will compile the financial statements and prepare and file the income-tax return of [Client name] for the assessment year [AY].
The compilation will be performed in accordance with the Standard on Related Services (SRS) 4410 (Revised). We will apply accounting and reporting expertise to assist you in preparing and presenting the financial information from the records, documents and explanations you provide, and we will prepare the return of income from that information. THIS IS NOT AN ASSURANCE ENGAGEMENT: we will not audit or review the information, we will not verify its accuracy or completeness, and we will express no audit opinion or review conclusion. Independence is not required for a compilation engagement, though the ethical requirements of the Institute otherwise apply.
- the accuracy and completeness of all records, documents, explanations and other information provided, including bank statements, investment proofs, deduction claims and reconciliation with Form 26AS and the Annual Information Statement
- the judgments needed in preparing the financial information, including the selection of the applicable framework and the tax positions adopted
- review of the draft computation and return before filing, and e-verification of the return within the statutory time
- retention of the underlying records for the periods required by law
Our fees for the engagement are [fee terms], plus applicable taxes and out-of-pocket expenses. Kindly confirm your agreement by signing and returning the enclosed copy of this letter.
For [Firm name]
Chartered Accountants
Firm Registration No.: [FRN]
([Partner name])
Partner
Membership No.: [M. No.]
Signature: ______________________ Name: ______________________
Designation: __________________ Date: ______________________
Why this letter matters for routine ITR work
| Point | Position |
|---|---|
| Nature of the work | A compilation on SRS 4410 (Revised) principles – accounting expertise applied to information the client provides; expressly NOT an assurance engagement |
| No opinion, no verification | The letter states in terms that you will not audit, review or verify the information and will express no opinion – the line that matters when a claim is questioned later |
| Client responsibilities | Accuracy and completeness of everything supplied – bank statements, investment proofs, deduction claims – and reconciliation with Form 26AS and the AIS |
| Review and e-verification | The client reviews the draft computation and return before filing and e-verifies within the statutory time |
| Independence | Not required for a compilation engagement, though the Institute’s ethical requirements otherwise apply |
| Records | The client retains the underlying records for the statutory periods – the letter fixes that too |
FAQs
Do I really need an engagement letter just to file returns?
SRS 4410 requires the terms to be agreed before a compilation engagement begins, and even for pure return-preparation the letter is the practitioner’s best protection: it fixes who owns the numbers. When a deduction is disallowed or income surfaces later, the letter is the difference between a defended position and an argument.
Does this work for a salaried individual’s return?
Yes – scale it down. The compilation paragraphs matter less, but the core lines – information provided by you, no verification by us, you review and e-verify – carry exactly the same protective weight for a salary return as for a business one.
Is a UDIN needed for filing a return?
No – merely preparing and filing a return is not an attest function, so no UDIN is generated. If a certificate accompanies the work (a net-worth or income certificate, for instance), that certificate needs its own engagement terms and a UDIN.
What if the client gives me wrong or incomplete data?
The letter puts accuracy and completeness of the information squarely on the client, including 26AS and AIS reconciliation. That does not license carelessness – but it means the responsibility for what was supplied sits where it belongs.
Why does the letter mention e-verification?
Because an unverified return is treated as not filed, and the practitioner should never be the one holding that risk. The letter records the client’s undertaking to review the draft and e-verify within the statutory window.
Can I adapt this for GST return filing retainers?
The structure carries over – non-assurance framing, client-owned data, review before filing – but GST engagements have their own compliance calendar and the generator’s GSTR-9/9C assistance letter is the better starting point for annual-return work.
Method notes: this format is generated from the same drafting engine as the linked generator, against the standards and Council requirements as they stand in July 2026. All wording is original; nothing is reproduced from ICAI publications. Replace every highlighted placeholder, place the letter on the proper letterhead and have the signing person review each paragraph against the facts of the engagement. Reviewed by a practising CA; updated July 2026.