In a bid to uphold the quality and integrity of tax audit practices, the Council of the Institute of Chartered Accountants of India (ICAI) has reaffirmed and clarified the cap on the number of tax audits a Chartered Accountant (CA) can undertake in a financial year.
The decision was taken during the Council’s 442nd and 443rd meetings held on May 26–27, 2025 and June 30–July 1, 2025, respectively.
As per the revised guidelines:
- Existing Limit Retained: The existing ceiling of 60 tax audit assignments per member has been retained, but it will now specifically apply to each financial year.
- Cap Applies in All Roles: This limit will apply to all tax audit assignments accepted and signed, whether the CA is acting individually or as a partner in one or more firms. Simply put, no individual CA can sign more than 60 tax audit reports in a financial year, regardless of the number of firms they are associated with.
- No Sharing of Limits Among Partners: The ICAI has emphasized that the limit is non-transferable among partners. One partner’s unused quota cannot be shared or transferred to another partner within the same firm.
- Certain Sections Exempt: Notably, audits under clauses (c), (d), and (e) of Section 44AB—relating to presumptive taxation schemes under Sections 44AE (transport), 44ADA (professionals), and 44AD (small businesses)—have been excluded from the 60-audit limit. This exclusion is expected to ease compliance for small businesses and professionals who fall under these simplified regimes.
- Revised Reports Not Counted: In cases where tax audit reports are revised, such revised reports will not be counted separately toward the 60-report cap.
These new guidelines will come into effect from April 1, 2026, and will remain in force until further notice.
The ICAI has long maintained that limiting the number of tax audits a CA can perform ensures due diligence, independence, and quality assurance, especially in the context of increasing complexities under the Income-tax Act, 1961.
The move is seen as part of ICAI’s ongoing efforts to balance workload, enhance audit quality, and curb unethical practices, while also addressing member concerns on clarity and compliance.
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