Income tax audit 2025: Important deadlines, guidelines, and sanctions

For the fiscal year 2024–2025, an income tax audit report must be submitted by September 30, 2025. This occurs only a few weeks after the deadline for filing income tax returns (ITRs) for the majority of individuals and Hindu Undivided Families (HUFs).

October 31, 2025, has been specified as the ITR Filing date for businesses, proprietorships, and partners in firms whose accounts are auditable.

But first, the audit report needs to be submitted by the September deadline. No extension has been announced by the Income Tax Department as of yet.

A TAX AUDIT: WHAT IS IT?

In essence, a tax audit is a financial examination. It entails reviewing a professional’s or business’s financial records to ensure that taxes are computed in accordance with the law and that income, expenses, and deductions are accurately documented.

Ensuring adherence to the Income Tax Act is more important than identifying flaws.

Is an audit of one’s accounts necessary?

Everybody is not subject to a tax audit. It primarily affects companies with annual sales of more than Rs 1 crore. The cap is loosened to Rs 10 crore in situations when cash transactions make up less than 5% of all transactions.

When a professional’s annual revenue surpasses Rs 50 lakh, the law takes effect. However, in some cases, even if these levels are not reached, an audit might still be necessary.

WHAT HAPPENS IF THE AUDIT REPORT IS DELAYED?

It can be expensive to miss the deadline. The Income Tax Act’s Section 271B stipulates that failure to file the audit report by September 30 results in a penalty. The fine is up to Rs 1,50,000 and equals 0.5% of total sales, turnover, or revenues.

If the taxpayer can provide a good explanation for the delay, there is relief. The tax department may waive the penalty in these circumstances.

WHY IT IS IMPORTANT

Compliance with tax audits is essential for professionals and organizations. Filing the report on time not only avoids penalties but also clears the way for smooth ITR filing.

With just days left for the deadline, taxpayers who fall under the audit bracket should ensure their accounts are in order and reports submitted without delay.