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Tax audit late filing penalty calculator AY 2026-27

The tax audit report for FY 2025-26 is late, or was never filed. Enter the turnover and the dates to see the Section 271B exposure — 0.5% of turnover, capped at ₹1.5 lakh — against the extended 2026 due date, the fixed fee that takes over for FY 2026-27, and how far the reasonable-cause defence is likely to carry on your facts.

Which year?
The penalty became a fixed fee from tax year 2026-27 — the two years work differently
The assessee
Nature of activity
Total sales, turnover or gross receipts (₹)
₹2,40,00,000 — the ₹1.5 lakh ceiling is reached at ₹3 crore.
What happened?
Specified date for AY 2026-27
Specified date
Date the report was furnished
The date the report was uploaded and accepted on the portal.
Reasonable cause — select only what you can prove with dated evidence

How the tax audit late filing penalty is worked out for FY 2025-26 (AY 2026-27)

Section 271B of the Income-tax Act, 1961 applies where a person fails to get accounts audited, or fails to furnish the audit report, as required under Section 44AB. The Assessing Officer may direct a penalty equal to one-half per cent of the total sales, turnover or gross receipts in business — or of the gross receipts in profession — or ₹1,50,000, whichever is less. The ceiling is reached at a turnover of ₹3 crore, so for every assessee above that figure the exposure is the same ₹1,50,000. The amount is not graded by the length of the delay: a report one day late and a report never filed carry the same ceiling.

The penalty is not automatic. The section uses the words "may direct", it can be imposed only after the assessee has been heard, and Section 273B provides that no penalty is imposable where the assessee proves there was reasonable cause for the failure. The burden is on the assessee and the cause has to be evidenced — illness, the resignation or death of the auditor, delay in a prior statutory audit of a company or co-operative society, a documented portal failure, or a genuine and reasoned belief that Section 44AB did not apply have all been accepted on the right facts. Where the audit was completed in time and only the upload was late, tribunal benches have frequently deleted the penalty as a technical or venial breach, applying the Supreme Court’s observation in Hindustan Steel Ltd v. State of Orissa that a penalty should not be imposed merely because it is lawful to do so.

For FY 2025-26 (AY 2026-27) the specified date for the report was 30 September 2026, and the CBDT extended it in late September 2026 to 21 October 2026, moving the audit-case return date from 31 October to 21 November 2026. Assessees who also furnish a transfer pricing report under Section 92E were outside the extension; their date remains 31 October 2026. This is also the last year of Section 271B. From tax year 2026-27, under the Income-tax Act, 2025, the Finance Act 2026 replaces the penalty with a fee under Section 428(c) — ₹75,000 where the failure continues for up to one month and ₹1,50,000 beyond that — a fixed amount that does not depend on turnover.

Worked example — a trader whose report went up three weeks late

A proprietary trading business has turnover of ₹2.4 crore for FY 2025-26 and is liable to audit under Section 44AB. The auditor signed the report on 17 October 2026, but the proprietor was hospitalised and the report was accepted on the portal only on 12 November 2026.

Inputs
Turnover₹2,40,00,000
Specified date (as extended)21 October 2026
Audit completed17 October 2026 — within time
Report furnished12 November 2026 — 22 days late
CauseHospitalisation, with discharge summary
Output
0.5% of turnover₹1,20,000
Ceiling₹1,50,000
Maximum penalty₹1,20,000 (the lower figure)
Reasonable-cause defenceStrong — audit in time, documented cause
The exposure is ₹1,20,000, not ₹1,50,000, because 0.5% of turnover is below the ceiling. The defence rests on two things that are both provable: the audit report is dated before the specified date, and the medical record covers the gap. Had the same facts arisen for tax year 2026-27, the answer would be a fee of ₹75,000 for a delay within one month — lower in amount, but with far less room to argue.

Common mistakes

Quoting ₹1.5 lakh as the penalty for everyone
The penalty is the lower of 0.5% of turnover and ₹1,50,000. A professional with gross receipts of ₹80 lakh faces a maximum of ₹40,000. The ceiling bites only from ₹3 crore upward.
Treating a completed audit as compliance
Section 44AB requires the report to be furnished by the specified date, not merely obtained. A report signed in time but uploaded — or accepted by the assessee on the portal — after the date is a default. The upload is not complete until the assessee accepts it.
Relying on reasonable cause without evidence
Section 273B puts the burden on the assessee. An affidavit saying the accountant was unwell is not the same as a medical record with dates. The cause must also cover the entire period of delay — every week after the cause ended needs its own explanation.
Pleading the auditor’s workload
Pressure of work, a late start by the client, or the auditor being busy in the season have not been accepted as reasonable cause. They explain the delay; they do not excuse it.
Assuming the 30 September date for AY 2026-27
The CBDT extended the specified date to 21 October 2026 for this year. A report filed between 1 and 21 October 2026 is in time. The extension did not cover assessees furnishing Form 3CEB, whose date was already 31 October 2026.
Levying 271B where no books exist
If no books of account were maintained, the default is under Section 44AA and the penalty under Section 271A. The Allahabad High Court in Bisauli Tractors and the Gauhati High Court in Surajmal Parsuram Todi held that a Section 271B penalty does not lie on top of it.
Carrying the old defence into the new Act
From tax year 2026-27 the default attracts a fee under Section 428(c) of the Income-tax Act, 2025 — ₹75,000 or ₹1,50,000. A fee is charged for the delay itself. The habit of filing late and arguing reasonable cause afterwards should end with the AY 2026-27 audit.

Frequently asked questions

What is the penalty for not getting a tax audit done for FY 2025-26?+
Under Section 271B, 0.5% of the total sales, turnover or gross receipts in business, or of gross receipts in profession, or ₹1,50,000, whichever is less. It applies to a failure to get the accounts audited and to a failure to furnish the audit report as required by Section 44AB.
Is there a penalty for late filing of the tax audit report in 2026?+
Yes, the same Section 271B applies, because Section 44AB requires the report to be furnished by the specified date. The maximum is the same regardless of the length of the delay. In practice the penalty is often dropped where the audit was completed in time and a reasonable cause for the late upload is shown.
What is the tax audit due date for AY 2026-27 — was it extended?+
21 October 2026. The statutory specified date of 30 September 2026 was extended by the CBDT in late September 2026, and the return due date for audit cases moved from 31 October to 21 November 2026. For assessees required to furnish a report under Section 92E, the date remains 31 October 2026.
Is the Section 271B penalty mandatory?+
No. The section says the Assessing Officer "may direct" the penalty, the assessee must be given an opportunity of being heard, and Section 273B bars the penalty where reasonable cause for the failure is proved.
What counts as reasonable cause under Section 273B?+
A cause that would have prevented a reasonable and prudent person from complying, proved by evidence. Accepted examples include serious illness, the auditor’s resignation or death, a delayed statutory audit under another law, a documented portal failure, loss of records by fire or flood, and a genuine belief on reasoned grounds that the audit was not required. Workload and oversight have not been accepted.
How is the 0.5% computed if turnover is ₹5 crore?+
0.5% of ₹5 crore is ₹2,50,000, which exceeds the ceiling, so the maximum penalty is ₹1,50,000. The ceiling applies to every assessee with turnover above ₹3 crore.
Can Section 271B be levied if no books of account were maintained?+
High Courts have held that it cannot. Where books were not maintained, the default is under Section 44AA and attracts Section 271A; an audit of non-existent books is impossible, so Section 271B does not follow — CIT v. Bisauli Tractors (Allahabad) and Surajmal Parsuram Todi v. CIT (Gauhati).
What is the tax audit late fee for FY 2026-27 (tax year 2026-27)?+
₹75,000 where the failure continues for up to one month and ₹1,50,000 after that. The audit obligation moves to Section 63 of the Income-tax Act, 2025, and the Finance Act 2026 converts the old penalty into this fee under Section 428(c). The fee is a fixed amount and does not depend on turnover.
Does a late tax audit report make the return defective?+
A return that is required to be accompanied by the audit report and is filed without it can be treated as defective under Section 139(9), and must be cured within the time allowed in the defect notice. Where the report is on record before the return is filed, the return itself is not defective — but the late report remains a Section 271B default.

Authoritative sources

CBDT
Income-tax Act, 1961 — Section 271B — Penalty of one-half per cent of total sales, turnover or gross receipts, or ₹1,50,000, whichever is less, for failure to get accounts audited or furnish the report as required under Section 44AB.
CBDT
Income-tax Act, 1961 — Section 273B — No penalty is imposable under the listed provisions, including Section 271B, where the assessee proves that there was reasonable cause for the failure.
CBDT
Income-tax Act, 1961 — Section 44AB — Requires the accounts to be audited before the specified date and the report furnished by that date — one month before the due date of the return under Section 139(1).
CBDT
CBDT press release and circular of 28 September 2026 — extension for AY 2026-27 — Extends the specified date for furnishing the audit report for AY 2026-27 from 30 September 2026 to 21 October 2026, and the audit-case return date to 21 November 2026.
CBDT
Income-tax Act, 2025 — Sections 63 and 428, as amended by the Finance Act 2026 — From tax year 2026-27 the audit requirement sits in Section 63, and the failure attracts a fee under Section 428(c) of ₹75,000 for a delay up to one month and ₹1,50,000 thereafter.
Always confirm against the latest version of the source. Regulations evolve and amendments are common.
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Last reviewed: 2026-10-01 · For informational purposes only — not professional advice.