ICAI warns Chartered Accountants to strictly follow Tax Audit Limit, Effective From April 30

ICAI warns Chartered Accountants to strictly follow Tax Audit Limit, Effective From April 30

The Institute of Chartered Accountants of India (ICAI) has recently issued a public announcement dated July 30, 2025, imposing a limit on the number of audits allowed in a financial year. The aim behind this action is to ensure a quality tax audit. This amendment was first discussed in the 442nd meeting held on 26th and 27th May, 2025 and then in the 443rd meeting held on 30th June, 2025 and 1st July, 2025. This change will be made effective with the issuance of new guidelines as stated below:

(i) The earlier limit of 60 tax audit assignments per chartered accountant (CA) will stay the same. This limit applies to audits done during a particular financial year.

(ii) This limit of 60 tax audit assignments is a total limit, whether the CA is doing the audit alone or as a partner in a firm. That means a CA cannot sign more than 60 tax audit reports in total in a financial year.

(iii) Partners in a CA firm cannot share this limit among themselves. Each partner has their own separate limit of 60 audits, and one partner cannot use another partner’s quota.

(iv) The 60-audit limit does not apply to some special types of tax audits. Specifically, it does not apply to audits under sections 44AE, 44ADA, and 44AD (which usually cover small businesses and professionals under presumptive taxation).

(v) If a tax audit report is revised, the revised version will not be counted again towards the limit of 60 audits.

These amendments will be made effective for the tax audits under Section 44AB of the Income Tax Act, 1961, from April 01, 2026, and will continue to be in force until further related orders are issued. Complete comprehensive guidelines are issued on the official website of ICAI.