Income Tax Audit Report Deadline: Who Must File by September 30 and What Happens If You Miss It
The Income Tax Department has reminded taxpayers that the deadline for filing the Tax Audit Report (TAR) is September 30, 2025. Under Section 44AB of the Income Tax Act, 1961, specific categories of taxpayers are required to get their accounts audited and file the audit report within this timeline. Failing to meet the deadline may result in penalties.
So, who falls under the ambit of tax audit, what exemptions exist, and what are the consequences of missing the due date? Here’s a complete breakdown.
What Is a Tax Audit Report?
A tax audit report is a detailed statement of accounts verified by a chartered accountant to ensure that a taxpayer’s financial records comply with income tax laws. Section 44AB of the Income Tax Act mandates filing of this report for individuals and businesses that meet certain conditions.
If you run a business with a turnover exceeding ₹1 crore, you are required to file a tax audit report. However, the threshold increases to ₹10 crore if at least 95% of your transactions are digital, as the government aims to encourage cashless payments.
Key Deadline for 2025
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Taxpayers not required to get their accounts audited had a return filing deadline of September 15, 2025 (extended by one day from the original date).
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For those who must undergo an audit, the final date to file the tax audit report is September 30, 2025.
Missing this date could invite penalties unless there is a reasonable cause accepted by the Income Tax Department.
Penalty for Missing the Deadline
If a taxpayer under Section 44AB fails to file the audit report by September 30, the penalty will be 0.5% of total turnover or ₹1.5 lakh, whichever is lower.
This penalty can only be waived if the taxpayer demonstrates a valid reason for the delay.
Which Professionals Are Covered?
Tax audit is not limited to businesses alone. Certain professionals are also covered under these provisions:
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Doctors
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Lawyers
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Chartered Accountants
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Company Secretaries
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Cost and Management Accountants
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Engineers
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Architects
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Film industry professionals
For these categories, if annual gross receipts exceed ₹50 lakh, filing of a tax audit report is mandatory.
Presumptive Taxation and Audit Requirement
Many professionals and small businesses opt for the presumptive taxation scheme under Sections 44AD and 44ADA, where income is declared at a prescribed percentage of gross receipts instead of maintaining detailed accounts.
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For professionals under Section 44ADA, 50% of gross receipts are treated as income. This benefit is available only if annual receipts do not exceed ₹50 lakh (or ₹75 lakh in cases where cash receipts are less than 5%).
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If a taxpayer under presumptive taxation claims income lower than the prescribed rate, they must maintain books of accounts and file a tax audit report.
Tax expert Balwant Jain explains that presumptive taxation is designed for ease of compliance, but the moment a taxpayer declares income lower than the assumed threshold, a full audit becomes unavoidable.
Consequences of Non-Compliance
Failure to file a tax audit report can have several implications beyond monetary penalty:
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Delayed return filing – Without the audit report, the Income Tax Return (ITR) cannot be submitted.
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Penalty burden – As mentioned, taxpayers could face up to ₹1.5 lakh in fines.
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Scrutiny risk – Non-compliance may trigger deeper investigations by tax authorities.
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Loss of benefits – Certain deductions and exemptions may not be available if the audit requirement is ignored.
Final Word
The September 30 deadline for filing tax audit reports is critical for businesses and professionals falling under Section 44AB. With penalties and compliance risks at stake, taxpayers must not delay in consulting their chartered accountants and ensuring timely filing.
For those under the presumptive taxation scheme, a clear understanding of income thresholds and digital transaction benefits is essential to avoid unnecessary audits.
Simply put: if your business turnover or professional income crosses the prescribed limit, or if you choose not to declare income at presumptive rates, you must file a tax audit report before September 30. Doing so safeguards you from penalties, ensures compliance, and helps maintain smooth relations with tax authorities.
