Tax audit reporting in India now runs on two tracks. Audits of FY 2025-26 (AY 2026-27) are still reported under section 44AB of the Income-tax Act, 1961 in Form 3CA or Form 3CB, each accompanied by Form 3CD, with a due date of 30 September 2026. From Tax Year 2026-27, the audit under section 63 of the Income-tax Act, 2025 is reported in a single Form No. 26, which merges all three. This guide explains which form applies to which taxpayer, how the choice between 3CA and 3CB is made, what Form 26 changes, and the portal steps that complete the filing.
Which form applies for which year
| Period | Law | Report | Due date |
|---|---|---|---|
| FY 2025-26 (AY 2026-27) | Section 44AB, Income-tax Act, 1961 | Form 3CA + Form 3CD, or Form 3CB + Form 3CD | 30 September 2026 |
| Tax Year 2026-27 onwards | Section 63, Income-tax Act, 2025 | Form No. 26 (Rule 47, Income-tax Rules, 2026) | 30 September 2027 for Tax Year 2026-27 |
The Income Tax Department confirms this split in its Income Tax Forms FAQ on the e-Filing portal (questions 29 and 30). The CBDT FAQs on Form No. 26 add that Forms 3CA, 3CB and 3CD continue for previous years relevant to assessment years up to 2026-27, and that Form 26 applies to tax years commencing on or after 1 April 2026. A CA signing a report this month for FY 2025-26 therefore still uses the 1961 Act forms and the 1961 Act section references.
Who needs a tax audit in the first place
Form selection comes second. The first question is whether the audit requirement applies at all. According to the Department's FAQ, section 63 of the 2025 Act mirrors section 44AB of the 1961 Act and the thresholds have not changed. The Form 26 FAQs list the cases in which a person carrying on business or profession must get the accounts audited:
- Business: total sales, turnover or gross receipts above ₹1 crore. The limit rises to ₹10 crore where cash receipts do not exceed 5% of total receipts and cash payments do not exceed 5% of total payments. Both conditions must be met.
- Profession: gross receipts above ₹50 lakh.
- Presumptive taxation cases: where income is declared lower than the deemed income under section 58(2) or 61(2) of the 2025 Act, and where a person opts out of the presumptive scheme within the lock-in period while income exceeds the basic exemption limit.
Worked example: the ₹10 crore condition
A wholesale trader has turnover of ₹7.5 crore in the year. Total receipts are ₹7.6 crore and total payments are ₹7.2 crore.
- Case 1: cash receipts are ₹20 lakh (2.63% of total receipts) and cash payments are ₹45 lakh (6.25% of total payments). Cash payments cross 5%, so the higher limit is not available. The ₹1 crore limit applies and a turnover of ₹7.5 crore requires a tax audit.
- Case 2: cash receipts stay at ₹20 lakh, but cash payments are ₹30 lakh (4.17% of total payments). Both ratios are within 5%, so the ₹10 crore limit applies. Turnover of ₹7.5 crore is below it, and no audit is triggered on the turnover test. The presumptive taxation triggers still need to be checked separately.
A consultant with professional gross receipts of ₹62 lakh crosses the ₹50 lakh limit for professions and needs a tax audit regardless of how the fees were received.
Form 3CA or Form 3CB: the only question that decides it
The Department's Form 3CB-3CD FAQ sets out the rule. Form 3CA-3CD applies to a person who is required by or under any other law to get its accounts audited. Form 3CB-3CD applies to a person who is not required by or under any other law to get its accounts audited and who needs a tax audit under section 44AB.
The legal form of the taxpayer does not settle the choice on its own. The test is whether another statute requires the accounts to be audited. A company audited under the Companies Act falls in Form 3CA. A proprietor or a partnership firm with no statutory audit under another law falls in Form 3CB. Any entity whose governing law mandates an audit belongs in 3CA, even if it is not a company. Where a statutory audit exists, the tax auditor does not repeat it. Form 3CA links the tax audit reporting to the accounts already audited under that other law, while in Form 3CB the tax auditor reports on the accounts directly.
| Situation | AY 2026-27 form | Form 26 part (Tax Year 2026-27) |
|---|---|---|
| Accounts audited under another law, such as the Companies Act | Form 3CA + Form 3CD | Part A, Part B and Part C |
| No audit required under any other law | Form 3CB + Form 3CD | Part A, Part B and Part D |
What Form 3CD is
Form 3CD is the statement of prescribed particulars that accompanies the audit report. It is never an alternative to 3CA or 3CB, so the only valid combinations are 3CA with 3CD and 3CB with 3CD. The Form 3CA-3CD user manual explains that Part A (clauses 1 to 8) covers the basic details of the assessee, and Part B (clauses 9 to 44) carries the detailed reporting clauses. Every clause should tie back to the books, the audited financial statements where they exist, the tax computation and the supporting schedules.
For interpretation of individual clauses, the ICAI Direct Taxes Committee has issued the Guidance Note on Tax Audit under Section 44AB of the Income-tax Act, 1961 (Revised 2026), a 605-page reference for auditors.
What changes with Form No. 26
According to the CBDT FAQs on Form No. 26, the new form is the report of audit of accounts and statement of particulars under section 63, prescribed by Rule 47 of the Income-tax Rules, 2026. All section references in it are to the 2025 Act and the 2026 Rules, not the 1961 Act. The form has four parts:
- Part A: particulars of the assessee.
- Part B: statement of particulars required under section 63. It applies uniformly in all cases and takes over the role of Form 3CD.
- Part C: audit report where the accounts have been audited under any other law, the old Form 3CA situation.
- Part D: audit report where the accounts are not audited under any other law, the old Form 3CB situation.
The underlying test for Part C or Part D is the same as before, so the 3CA versus 3CB logic carries over directly. The reporting itself changes in several ways that auditors should plan for:
- Every clause in Part B needs a mandatory Yes or No answer. Schedules are trigger-based and are required only when the related clause is answered Yes. All schedules form part of the audit report and must be verified by the auditor.
- The form must be signed by an accountant as defined in section 515(3)(b) of the 2025 Act. UDIN is mandatory, and the Firm Registration Number is required where the audit is done in a firm's name.
- Audit observations and qualifications must be classified as test-check based applying materiality, based on management representation, or unable to verify. The auditor must also state the impact, if any, on profit, loss or book profit of qualifications, adverse remarks, disclaimers or emphasis of matter in the statutory audit.
- Where books are kept electronically, Rule 46 requires backup servers located in India, and the form asks for the server IP addresses and locations.
- For TDS and TCS, the auditor reports the number of transactions reported and not reported in the returns, and the amount of those not reported.
- Clause 36, which corresponds to clause 18 of Form 3CD on depreciation, segregates assets used for less than 180 days and for 180 days or more without asking for specific dates.
- Clause 43 is limited to remittances actually reported in Part D of Form No. 145 during the tax year.
- Clause 53 requires quantitative details only where the assessee has a trading unit or a manufacturing concern.
- GST reporting has been rationalised and the earlier reconciliation requirement removed.
The due date for Form 26 is the specified date, which the FAQs define as one month before the due date for the return of income under section 263(1).
Filing on the e-Filing portal, step by step
The portal workflow described in the Form 3CA-3CD user manual needs actions from both the taxpayer and the CA:
- Confirm prerequisites. The taxpayer and the CA must both be registered on the e-Filing portal with active PAN status and valid Digital Signature Certificates. For individual taxpayers, the manual recommends linking PAN with Aadhaar.
- Taxpayer assigns the form. Go to Dashboard, then e-File, Income Tax Forms, File Income Tax Forms and select Form 3CA-3CD or Form 3CB-3CD. Choose the filing type and assessment year, and assign the CA.
- CA accepts the assignment. The request appears in the CA's worklist. A CA who rejects it must give a reason.
- CA prepares and uploads. The CA prepares the form in the offline utility, generates the JSON, uploads it and signs with DSC.
- Taxpayer accepts and verifies. Go to Dashboard, Pending Actions, Worklist, Pending for Acceptance. Check the report, accept it and e-verify with DSC. A taxpayer who rejects the report must also record a reason.
- Keep the acknowledgement. The success screen shows a Transaction ID and an Acknowledgement Receipt Number, and a confirmation is sent by email and SMS.
Form 26 follows the same pattern of engaging the accountant, preparing the form, generating UDIN, signing with DSC, uploading and electronic acceptance by the assessee. For the UDIN step and its time limits, see our guide on UDIN for practising CAs.
Mistakes that hold up a tax audit filing
- Choosing 3CB for every non-company. The test is an audit requirement under another law, not the label of the entity.
- Treating 3CD as a separate option. It always travels with 3CA or 3CB.
- Using the wrong year's framework. FY 2025-26 audits use the 1961 Act forms and section numbers. Form 26, with 2025 Act references, starts with Tax Year 2026-27.
- Leaving the portal steps to the last day. Assignment, CA acceptance and DSC validity are separate steps. An expired DSC or an unassigned form can delay a filing close to 30 September.
- Stopping after the CA upload. The filing is complete only after the taxpayer accepts and e-verifies. Track the acknowledgement, not just the upload.
- Not preparing for Form 26 data. Start capturing server location details, TDS/TCS transaction counts and 180-day asset use data during Tax Year 2026-27, rather than reconstructing them at audit time.
Before closing the engagement, keep one completion record with the year and form, the CA submission, the taxpayer's acceptance and verification, and the acknowledgement number. Clause-level judgements still need the underlying evidence and the ICAI guidance.
Updated on 27 September 2026: added Form No. 26 under section 63 of the Income-tax Act, 2025, merged our separate Form 3CA vs Form 3CB guide, and added threshold examples and the portal rejection steps.
