Central Board of Direct Taxes (CBDT) has provided relief to taxpayers and professionals by providing extension of deadline to file income tax audit report to the financial year 2024-25 (Assessment Year 2025-26). The new due date will be October 31, 2025 (one month later than the previous date of September 30, 2025).
This applies to the assessees under clause (a) of the Explanation 2 to sub-section (1) of section 139 of the Income Tax Act, 1961. These involve businesses and professionals bound with having to go through tax audits as prescribed by Section 44AB.
The Reason the Extension was Provided.
It was decided upon after years of being canvassed by professional associations, such as Chartered Accountant associations, which pointed to real challenges of taxpayers. The irregularities posed by the recently experienced floods and other natural disasters in some parts of the country had significantly affected normal business and professional activities. Several High Courts also realized the matter and demanded more time.
Interestingly, CBDT explained that the e-filing portal of Income Tax has been operating glitch free without any significant glitches. On September 24, 2025, over 4.02 lakh Tax Audit Reports were already uploaded, and 60,000 filings were done on a single day. With this efficiency of its operations, the Board decided to give extensions to the deadline due to the extraordinary difficulties on the ground.
Tax Audit Requirements
Section 44AB under which a tax audit is compulsory is:
- Companies whose yearly turnover is above Rs1 crore.
- Individuals who have gross receipts of above Rs50 lakh.
- In presumptive taxation plans, taxpayers who report profits that are lower than the set limits.
A penalty could be imposed under Section 271B in case the audit report is not provided within the due date. The fine is half of the turnover or gross receipts, which is limited to Rs1.5 lakh. It is, however, not necessarily placed on them, taxpayers may prove that there was a reasonable cause of the delay like natural calamities or illness, the penalty will be excused.
Industry Response
The extension has been greetedly received by tax practitioners who noted that it offered them a much-needed breath of relief after weeks of being shaken by the changes. It was observed by many that the extra time will aid in the proper filing so that fewer errors can occur and appropriate punishment can be avoided. The relocation is also considered as a right and opportune step to both bail out tax payers and professionals in difficult situations.
Month: Current Affairs - September 25, 2025
Category: current affairs daily