Tax Audit 2025: Simple Guide to Who Needs It and When it’s Due

As a business owner in India, staying ahead of your tax compliance is crucial for a smooth financial year. The term “Tax Audit” can often seem daunting, but understanding its basic rules—primarily the ‘when’ and the ‘if’—can make the process much simpler.

Let’s break down the two most critical questions for the Financial Year 2024-25 (Assessment Year 2025-26).

1. The Due Date: When is the Last Day?

For the financial year ending March 31, 2025, you must finish your tax audit and submit the report by:

🗓️ October 31, 2025

Remember: If you miss this date, you will have to pay a penalty.

2. The Rules: Who Needs a Tax Audit?

You need a tax audit if your business turnover (total sales) is more than the limits below.

For Most Businesses:

You need an audit if your total sales/turnover is over ₹ 1 Crore.

For Professionals (like Doctors, Lawyers, and Consultants):

You need an audit if your total professional fees/income is over ₹ 50 Lakhs.

The Special Case:

You also need an audit even if your turnover is less than ₹ 1 Crore (but more than ₹ 10 Lakhs) if you do not opt for the Presumptive Taxation Scheme (a simple way of paying tax where you don’t need to keep detailed books of account).

Simple Summary

Final Deadline: 📅 October 31, 2025

Good to know: Getting your tax audit done early helps you file your Income Tax Return (ITR) on time and avoid last-minute stress.

Tax Audit: More Important Things You Should Know

1. Business Losses

If your business makes a loss (your expenses are more than your income), you still need a tax audit if your turnover is over ₹ 1 Crore. This helps prove the loss to the tax department so you can adjust it against future profits.

2. Presumptive Taxation Scheme (Section 44AD)

This is a simple scheme for small businesses where you pay tax on a presumed profit (usually 8% of your turnover).

• If you CHOOSE this scheme: No tax audit is needed, even if your turnover is up to ₹ 3 Crores.
• If you LEAVE this scheme: If you use this scheme one year but opt out the next year, you are locked into a tax audit for the next 5 years. This is a very important rule to remember.

3. For Freelancers & Professionals (Section 44ADA)

For professionals like doctors, lawyers, and consultants, there is a similar presumptive scheme.

• You can declare a presumed profit of 50% of your gross receipts.
• If you declare less than this 50% profit, then a tax audit is mandatory.

4. Who Does the Audit?

Only a Chartered Accountant (CA) can perform a tax audit. They will check your account books and submit a special report called Form 3CB/3CD to the tax department on your behalf.

What Happens if You Don’t Get a Tax Audit?

If you are required to get an audit but don’t do it by the deadline (September 30), you may have to pay a penalty. The penalty is the higher of:

• ₹ 1,50,000 (1.5 Lakhs), or
• 0.5% of your total sales/turnover.

Conclusion:

    In short, a tax audit is a key part of your business’s financial health. Remember these three simple things:

1. Know Your Limit: For most businesses, the trigger is a turnover of ₹ 1 Crore. For professionals, it’s ₹ 50 Lakhs.
2. Mark Your Calendar: The absolute deadline to get it done is September 30, 2025, for the financial year ending March 2025.
3. Plan Ahead: Don’t wait for the last minute. Organise your records early and work with your chartered accountant.

      Be smart, be prepared, and file on time.