Tax Audit Report Filing 2025-26: Two High Courts in the country – the Karnataka High Court and the Rajasthan High Court – have directed the Central Board of Direct Taxes (CBDT) to extend the deadline for filing Tax Audit Reports (TAR) under Section 44AB of the Income Tax Act, 1961, by one month. Tax audit reports can now be filed until 31 October 2025.
The Karnataka High Court order came on the basis of a writ petition filed by the Karnataka State Chartered Accountants Association (KSCAA), seeking an extension of the tax audit deadline.
Earlier, the Rajasthan High Court’s Jodhpur Division Bench noted that the CBDT has granted such exemptions in previous years. This interim order came on a petition filed by the Jodhpur Tax Bar Association. Similar petitions are also being heard in other high courts across the country.
Rajasthan Court extends deadline to Oct, 31, 2025 for filing TAR and ITR
The Rajasthan High Court has also directed the CBDT to extend the deadline for related income tax returns (ITRs). As per CBDT, the deadline for filing TARs for AY 2025–26 is September 30, 2025, and the courts have directed that to October 31, 2025. This decision follows repeated representations from taxpayers, professionals, and industry bodies such as the ICAI.
Experts say that these orders will currently apply only to Karnataka and Rajasthan, unless the CBDT files an appeal or review petition in the Supreme Court. It will be interesting to see if the CBDT revises the deadline and gives a general extension for the entire country.
Tax professionals had been facing significant difficulties due to technical issues and delays in key utilities on the Income Tax e-filing portal. Login failures, slow portal performance, and difficulties accessing important documents such as the Annual Information Statement (AIS) were common problems.
Additionally, the delayed release of utilities for ITR-5, ITR-6, and ITR-7 filings was also a major challenge. The addition of expanded reporting requirements in the new Form 3CD significantly increased the workload of auditors.
Who is subject to tax audits?
Under Section 44AB, businesses with an annual turnover of more than Rs 1 crore need to file a tax audit report.
The limit should be increased to Rs 10 crore if the cash receipts/cash payments does not exceed 5% of the total receipts/total payments.
Freelancers and professionals such as doctors, lawyers, architects, or chartered accountants with annual income exceeding Rs 50 lakh are also required to undergo an audit.
Taxpayers falling under presumptive taxation schemes such as Section 44ADA may also be needed to undergo an audit, subject to the necessary conditions.
The current deadline for submitting tax audit reports is September 30, 2025, as per CBDT. Failure to do so may result in a penalty of up to 0.5% of turnover or Rs 1.5 lakh (whichever is lower)