Summary: The Institute of Chartered Accountants of India (ICAI) has clarified the implementation of the ceiling on Tax Audit assignments through the UDIN system. The ceiling is 60 Tax Audit assignments per financial year per member and applies with effect from 1 April 2026 under the Chartered Accountants (Limit on Number of Tax Audits) Guidelines, 2025. For computing the ceiling, specified sub-categories are Form 3CA under the third proviso to Section 44AB, Form 3CB under Section 44AB(a), Form 3CB under Section 44AB(b), and combined Form 3CB under Section 44AB. Other specified Form 3CB categories under clauses (c), (d) and (e) are treated as non-applicable sub-categories for this purpose. ICAI has noticed instances where some members are attempting to bypass the notified limit by generating UDINs under non-applicable categories. Members have accordingly been advised to generate UDINs strictly under the appropriate category and within the prescribed limits. A member who generates UDINs under an incorrect category with the intention of circumventing or bypassing the prescribed ceiling is liable to proceedings under the Chartered Accountants Act, 1949 and the Rules made thereunder.
FAQs on Ceiling for UDIN Generation under ‘Tax Audit’ Category
For implementation of the ceiling on Tax Audit assignments through the UDIN system, only specified sub-categories under “Tax Audit” shall be considered for computation of the ceiling.
The ceiling on Tax Audit assignments is 60 per financial year per member and is applicable with effect from 1st April, 2026. The same is governed by the “Chartered Accountants (Limit on Number of Tax Audits) Guidelines, 2025” as published in the Gazette of India is available at Annexure I.
Key definitions:
- Applicable sub-categories: Means the following sub-categories on which the ceiling shall be applicable:
1. Form 3CA – 3rd proviso to section 44AB
2. Form 3CB – Section 44AB(a)
3. Form 3CB – Section 44AB(b)
4. Form 3CB (Combined) under section 44AB
- Non-applicable sub-categories: Means all other sub-categories under Section 44AB except the above specified sub-categories:
1. Form 3CB – Section 44AB(c)
2. Form 3CB – Section 44AB(d)
3. Form 3CB – Section 44AB(e)
Q1. What are the consequences of generating UDINs under an incorrect or non-applicable category to circumvent the prescribed limit on the number of Tax Audits as per Income Tax Act 1961?
Ans. The attention of the Members is invited to the Gazette Notification No. F. No. 1-CA(7)/234/2025 dated 25th July, 2025 communicating the Chartered Accountants (Limit on Number of Tax Audits) Guidelines, 2025 issued by the Council on the Limit on Number of Tax Audits that can be undertaken by a Member. The ICAI has noticed instances where few Members are attempting to bypass the notified Limit by generating UDINs under non applicable categories in contravention of the said Guidelines. Members are, therefore, advised to generate UDINs strictly under the appropriate category only within the prescribed limits. Members generating UDINs under an incorrect category with the intention of circumventing or bypassing the prescribed limits are liable to be proceeded against under the Chartered Accountants Act, 1949 and the Rules made thereunder.
ICAI Caps Tax Audit Limits at 60 per partner from 1st April 2026
