Tax Audit under Section 63 & Form 26 — What Replaced 44AB and Form 3CD
Quick answer: From Tax Year 2026-27, the tax audit sits in Section 63 of the Income-tax Act 2025 (ex-44AB) and the report is Form 26 (ex-3CA/3CB/3CD), due one month before the return date — 30 September 2027 for most audited businesses. Missing it now costs a fixed fee under Section 428(c): ₹75,000 for up to one month's delay, ₹1,50,000 thereafter, replacing the old 0.5%-of-turnover penalty. Presumptive taxation moved to Section 58. The FY 2025-26 audit you file this season is still under the 1961 Act on 3CA/3CB/3CD.
Last verified 4 October 2026 — rules on this page checked against the current notifications. We update it the day a rule changes.
Section and form map
| Item | 1961 Act | 2025 Act / Rules 2026 |
|---|---|---|
| Tax audit requirement | s.44AB | s.63 |
| Audit report | Forms 3CA/3CB + 3CD | Form 26 (Rule 47) — one consolidated report with segment-wise clauses |
| Presumptive business / profession / goods carriage | 44AD / 44ADA / 44AE | s.58 (one table; non-residents s.61) |
| Consequence of default | s.271B penalty — 0.5% of turnover, max ₹1,50,000 | s.428(c) fee — ₹75,000 (delay up to one month) / ₹1,50,000 (beyond) after the Finance Act 2026 |
| Return of income | s.139(1) | s.263(1) |
Thresholds (unchanged in substance) and the new trigger question
- Business: audit above ₹1 crore turnover; ₹10 crore where cash receipts and cash payments are each ≤5%
- Profession: above ₹50 lakh gross receipts
- Presumptive (s.58): business ₹2 crore (₹3 crore with ≤5% cash) at 8%/6%; profession ₹50 lakh (₹75 lakh with ≤5% cash) at 50%
- Open point: practitioners read the s.63(1) table as requiring audit whenever an eligible business declares profit below 6%/8%, without the old basic-exemption safeguard; s.58(3) keeps the older wording. Until CBDT clarifies, we treat below-presumptive declarations as audit cases
Dates for Tax Year 2026-27
| Event | Date |
|---|---|
| Form 26 (audit report) — "specified date", one month before the return due date | 30 September 2027 (31 October 2027 where transfer-pricing applies) |
| Return of audited assessee | 31 October 2027 (30 November with transfer pricing) |
| Advance tax instalments feeding the audit year | 15 Jun / 15 Sep / 15 Dec 2026, 15 Mar 2027 — see advance tax |
| This season (FY 2025-26, AY 2026-27) | Still 3CA/3CB/3CD under the 1961 Act |
What we do
- Applicability check incl. the below-8% question; books and reconciliations (GST turnover vs ITR, TDS, cash-ratio test)
- Form 26 clause-by-clause with the auditor; same team handles TDS returns and notices
- Presumptive-to-audit transitions and the five-year lock consequences
Section and form numbers are quoted from the Income-tax Act, 2025, the Income-tax Rules, 2026 and CBDT's form FAQs; anything not yet confirmed on an official page is marked and checked at filing, never estimated.
Talk to us before you file anything
Frequently asked questions
What replaced Section 44AB?
Section 63 of the Income-tax Act 2025, for income from 1 April 2026 (Tax Year 2026-27).
What replaced Form 3CD?
Form 26 under Rule 47 of the Income-tax Rules 2026 — one consolidated audit report; FY 2025-26 audits still use 3CA/3CB/3CD.
What is the tax audit due date for Tax Year 2026-27?
30 September 2027 for most audited businesses (31 October 2027 with transfer pricing) — one month before the return due date.
What is the penalty for a late tax audit now?
A fixed fee under Section 428(c): ₹75,000 if the delay is up to one month, ₹1,50,000 beyond — replacing the old 0.5% of turnover capped at ₹1.5 lakh.
What is the audit turnover limit?
₹1 crore for business (₹10 crore where cash receipts and payments are each 5% or less) and ₹50 lakh for professions.
Is 44AD still available?
Yes — presumptive taxation now sits in Section 58 with the same ₹2/₹3 crore and ₹50/₹75 lakh limits.
Do I need an audit if I declare profit below 8%?
Possibly — the s.63 table is read by many as triggering audit in that case; treat it as an audit case until CBDT clarifies.
Which form applies to my FY 2025-26 audit?
Forms 3CA/3CB/3CD under the 1961 Act — the 2025 Act applies only from Tax Year 2026-27.