New Tax Audit Limit Guidelines by ICAI: Effective from 1st April 2026
Date of Announcement: 30th July 2025
Issued by: Direct Taxes Committee, The Institute of Chartered Accountants of India (ICAI)
In an effort to strengthen the quality of tax audits and ensure proper compliance, the Council of ICAI has introduced revised guidelines concerning the limit on tax audit assignments that a Chartered Accountant (CA) can undertake.
These new rules were approved during the 442nd and 443rd Council meetings held in May and July 2025 and will come into effect from 1st April 2026, applicable to audits under Section 44AB of the Income-tax Act, 1961.
✅ Key Highlights of the Revised Tax Audit Limit:
1. Limit of 60 Tax Audits per Member
The current ceiling of 60 tax audit assignments per member is being retained, but it will now explicitly apply on a per financial year basis.
2. Aggregate Limit for All Capacities
The limit of 60 will be counted in total, including audits signed by the member:
- In his/her individual professional capacity
- As a partner in one or more firms
🔍 What this means:
A Chartered Accountant cannot exceed signing 60 tax audit reports in total, regardless of how many firms he/she is associated with.
3. No Sharing of Limits Among Partners
Each partner of a CA firm will have their own individual limit of 60 audits.
➡️ This limit cannot be pooled or redistributed among partners of the same firm.
4. Certain Tax Audits Exempted from the Limit
The following types of tax audits will NOT be counted toward the 60-audit ceiling:
- Section 44AB(c): Tax audit for persons under presumptive taxation – Section 44AE (Transporters)
- Section 44AB(d): Tax audit for professionals under Section 44ADA
- Section 44AB(e): Tax audit for small businesses under Section 44AD
5. Revised Audit Reports Not Counted
In case a tax audit report is revised, the revised report will not be counted separately.
Only the original tax audit will be considered toward the limit.
🗓️ When Are These Changes Applicable?
These revised norms will apply from Financial Year 2026–27, i.e., for tax audits conducted on or after 1st April 2026.
They will remain in force until further notification is issued by ICAI.
📌 Why This Matters
With the growing complexity in taxation and increasing reliance on audit reports, ICAI’s move aims to ensure that:
- CAs maintain professional diligence and attention to quality
- Tax audits are conducted with sufficient time and care
- There is better regulation of audit workloads across practitioners
🔗 For More Information:
You can read the full official announcement and detailed guidelines here:
👉 ICAI Guidelines PDF
✍️ Final Thoughts
This is a significant step by ICAI to balance workload and maintain audit quality, especially with increasing regulatory scrutiny. CAs and firms should begin reviewing their current practices and plan resource allocation accordingly, well in advance of April 2026.
Read More Updates on ICAI
