For FY 2025-26 (AY 2026-27), the tax audit limit under section 44AB is ₹1 crore of turnover for a business and ₹50 lakh of gross receipts for a profession. The business limit rises to ₹10 crore if cash receipts and cash payments each stay within 5% of the totals.
Facts checked: 9 October 2026, under the Income-tax Act, 1961. The limit is only one of several triggers. A client below the limit can still need an audit under the presumptive-scheme clauses.
The limits at a glance
| Who | Audit needed when | Clause |
|---|---|---|
| Business | Turnover above ₹1 crore | 44AB(a) |
| Business, cash receipts and cash payments each ≤ 5% | Turnover above ₹10 crore | 44AB(a) proviso |
| Profession | Gross receipts above ₹50 lakh | 44AB(b) |
| Presumptive 44AD | Turnover ceiling ₹3 crore (cash condition applies) | 44AB(e) |
| Presumptive 44ADA | Receipts ceiling ₹75 lakh (cash condition applies) | 44AB(d) |
| 44AE, 44BB, 44BBB | Income declared below the deemed profit | 44AB(c) |
The cash condition for the higher limits is that cash receipts and cash payments are each 5% or less. Both must pass.
Worked example
A wholesaler has FY 2025-26 turnover of ₹6.2 crore. Cash receipts are ₹9 lakh (1.5%). Cash payments are ₹28 lakh against total payments of ₹5.4 crore (5.19%).
The payments test fails by a small margin, so the ₹10 crore limit is not available. Turnover is above ₹1 crore, so a tax audit is required. Had payments in cash been ₹26 lakh (4.81%), the limit would have been ₹10 crore and no audit would apply under 44AB(a).
Limits that people mix up
- Turnover, not profit. A loss-making business with ₹1.2 crore of turnover still needs an audit under 44AB(a) unless the higher limit applies.
- Profession and business together. Each is tested against its own limit.
- Presumptive ceilings are not audit limits. Going above the 44AD or 44ADA ceiling takes the client out of that scheme; audit then depends on the regular limits. Declaring lower income after opting out of 44AD for five years can trigger the audit under 44AB(e).
- Audited under another law. Where accounts are audited under another law before the specified date, the third proviso can allow the report to be given in the prescribed form; see the third proviso.
Next steps
Work out which clause applies using the Section 44AB applicability checker, then check the report date in the due date note. For the broader picture see who needs a tax audit and the year-by-year due dates.
Frequently asked questions
What is the income tax audit limit for AY 2026-27?
₹1 crore of turnover for business (₹10 crore if cash receipts and payments are each within 5%) and ₹50 lakh of gross receipts for a profession.
Is the ₹10 crore limit automatic?
No. Both the cash receipts test and the cash payments test must be met.
Does a client under the limit never need an audit?
No. Presumptive-scheme exits and lower-than-deemed income can still trigger one. Run every clause, as set out in which 44AB clause applies.
What is the penalty for missing a required audit?
Section 271B: the lower of 0.5% of turnover or receipts, or ₹1,50,000, subject to reasonable cause under section 273B.
Read the complete guide to section 44AB for the full process.
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