Income Tax Audit 2025: Everything You Need to Know About Rules & Penalties
Audit Date Extension : For taxpayers in the audit bracket, time is running out. Here is a brief overview of important dates, regulations, and penalties because the income tax audit deadline for FY 2024–2025 is quickly approaching. 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 reporting date for businesses, proprietorships, and partners in enterprises whose accounts are auditable.
But first, the audit report needs to be submitted by the September deadline. No extension has been issued by the Income Tax Department as of yet.
WHAT IS A TAX AUDIT?
In basic terms, 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 mostly 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 could still be necessary.
WHAT IF THE AUDIT REPORT IS NOT FILED ON TIME?
It might 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. In addition to avoiding fines, timely report filing paves the path for seamless ITR filing. Taxpayers who are in the audit bracket should make sure their accounts are in order and their reports are completed on time, as the deadline is just a few days away.
FAQ on Income Tax Audit 2025
Q1. What is the deadline for filing the tax audit report for FY 2024–25?
The deadline to file the income tax audit report for FY 2024–25 is September 30, 2025.
Q2. What is the deadline for filing ITR for businesses and professionals under audit?
For businesses, proprietorships, and partners in auditable enterprises, the ITR filing deadline is October 31, 2025.
Q3. Who needs to get a tax audit done?
Businesses with annual sales exceeding ₹1 crore (₹10 crore if cash transactions are less than 5% of total transactions).
Professionals with annual receipts exceeding ₹50 lakh.
In certain cases, even taxpayers below these limits may require an audit based on specific provisions of the Income Tax Act.
Q4. What happens if the tax audit report is not filed on time?
Failure to file by September 30, 2025, may attract penalties under Section 271B of the Income Tax Act. The penalty is the lesser of:
0.5% of total sales/turnover/gross receipts, or
₹1,50,000.
Q5. Can the penalty be waived if the audit report is delayed?
Yes. If the taxpayer can demonstrate a reasonable cause for the delay, the Income Tax Department may waive the penalty.
Q6. Why is a tax audit important?
Ensures compliance with the Income Tax Act.
Prevents penalties and legal complications.
Facilitates smooth ITR filing for businesses and professionals.
Q7. Is there any chance of the deadline being extended in 2025?
As of now, no extension has been announced by the Income Tax Department. Taxpayers are advised to prepare and file before the due date.
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