Income Tax Audit Updates 2025 – Extended Deadlines, New Clauses & Compliance Changes
Summary: The Central Board of Direct Taxes (CBDT) introduced several key updates to the Income Tax Audit process for Assessment Year 2025-26. The deadline for filing tax audit reports has been extended from September 30, 2025, to October 31, 2025, providing taxpayers and professionals an additional month for compliance, though the ITR filing date remains November 30. A total of 71 major changes were notified in Forms 3CA, 3CB, and 3CD, effective April 1, 2025. These include mandatory reporting under new Clause 36B for “Amount Received”, detailed disclosure on loans and deposits, and reporting of interest disallowance for delayed payments to MSMEs (Clause 22). New requirements also mandate the disclosure of expenses related to legal contraventions and income from sports and broadcasting. Furthermore, the Institute of Chartered Accountants of India (ICAI) has proposed capping the maximum number of tax audits an individual CA or partner can conduct at 60 per financial year, effective April 1, 2026. These procedural shifts align with the government’s focus on structured reporting and digitization, in anticipation of the new Income Tax Act, 2025, which is slated to replace the 1961 Act from April 1, 2026.
Introduction
The CBDT (Central Board of Direct Taxes) has made some major changes to the Income Tax Audit process for Assessment Year 2025–26 (FY 2024–25). These updates include:
The last date for filing tax audit reports has been extended.
New clauses and changes in Forms 3CA-3CD and 3CB-3CD.
New reporting requirements for MSME payments, law violations, and sports broadcasting income.
Audit limit proposal for Chartered Accountants.
Notification of the Income-tax Act, 2025.
Let’s explain each point in simple language.
1. Tax Audit Report Last Date Extended – AY 2025–26
The CBDT has extended the last date for filing tax audit reports for audit cases from September 30, 2025, to October 31, 2025.
Who applies?
Taxpayers liable for audit under section 139(1) Explanation 2(a).
Impact:
Businesses and professionals now have an extra month to prepare their audit reports.
Note: The last date for filing ITR is still November 30, 2025 (unless further extended).
2. Major Changes in Form 3CA/3CB & 3CD (Effective 1 April 2025)
Income Tax Department has made a total of 71 changes in audit forms:
35 changes in Form 3CA-3CD
36 changes in Form 3CB-3CD
Key Form Changes:
| Clause | Topic | What’s new |
| Clause 36B | New Entry | “Amount Received” report is mandatory. |
| Clause 31 | Loans/Deposits | Detail reporting of cash, cheque, code type required |
| Clause 22 | MSME Payments | If payment is not made on time then interest disallowance will have to be shown. |
| Clause 21 | Expenses related to Legal Contravention | Law violation must be reported |
| Clause 44BBC | New Clause | Disclosure of income related to sports, broadcasting, telecasting |
| Clauses 28 & 29 | Removed | These clauses have now been removed (redundant). |
Purpose: To make reporting transparent and align with real-time financial data.
3. New Audit Limit for Chartered Accountants (Effective FY 2025–26)
ICAI has proposed:
A CA (individual or partner) can only conduct a maximum of 60 tax audits per financial year.
Effective from: April 1, 2026
Why is it necessary?
This will improve audit quality and reduce workload on professionals.
4. New Income Tax Act, 2025 – Coming Soon
The government has notified the Income Tax Act, 2025, which will replace the old 1961 Act.
Applicable from: April 1, 2026
Expected Highlights:
- Compliance rules will be simplified.
- Tax audit definitions and thresholds may be revised.
- AI-based scrutiny methods may be introduced.
Summary Table – Quick Recap
| What was the topic before? | What is it now? |
| Audit Report Due Date | Sept. 30, 2025 → Oct. 31, 2025 |
| ITR Filing (Audit Cases) | Nov. 30, 2025 → No Change |
| CA Audit Limit | Practical limit: 60 → Official limit: 60 (from FY 2025–26) |
| Clause 22 | Basic MSME info → Interest disallowance details also need to be provided |
| Clause 36B | Was not there → “Amount Received” has become mandatory |
| New Act | Income Tax Act, 1961 → New Act from April 2026 |
Final Thoughts
The 2025 tax audit updates clearly show that the government is focused on:
- Increasing Transparency
- Promoting Digitization
- Implementing Structured Reporting
If you are a business owner, MSME, or CA, it is crucial to understand and timely comply with these changes.
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