CBDT directed to extend ITR filing deadline for these cases to November 30; check key details

The Gujarat High Court, on Friday (September 26, 2025), directed the Central Board of Direct Taxes (CBDT) to extend the income tax return (ITR) filing deadline for taxpayers subject to audit until November 30, 2025. Currently, the due date for filing tax audit reports is October 31, 2025.

This order followed CBDT’s move a day earlier to push back the tax audit report (TAR) deadline from September 30 to October 31, 2025, after similar directions were issued by the Rajasthan and Karnataka High Courts. The Gujarat HC’s ruling came in response to petitions filed by the All India Federation of Tax Practitioners (AIFTP) and the Chartered Accountants Association, Surat (CAAS).

On Thursday, the Central Board of Direct Taxes (CBDT) extended the deadline for filing audit reports for FY 2024-25 (Assessment Year 2025-26) from September 30 to October 31, 2025.

The move comes after repeated appeals from industry bodies and professional associations, which highlighted difficulties in meeting the earlier timeline. Floods and other disruptions in parts of the country were cited as reasons for the delay, affecting compliance efforts across regions.

What is a tax audit?

A tax audit is a review conducted by a Chartered Accountant (CA) to ensure that businesses and professionals maintain accurate books of accounts and comply with the provisions of the Income Tax Act.

The audit is mandatory under Section 44AB of the Income-tax Act, 1961 for certain categories of taxpayers. The CA conducting the audit submits the report using Form 3CA/3CB and 3CD, depending on the type of entity and whether another statutory audit (like under the Companies Act) is already required.

Who needs a tax audit?

Businesses: Tax audit is mandatory if turnover exceeds ₹1 crore. However, the threshold is raised to ₹10 crore if at least 95% of all transactions are done digitally (i.e., cash receipts and cash payments each do not exceed 5% of total turnover).

Professionals: Doctors, lawyers, architects, consultants, and other professionals must undergo an audit if gross receipts exceed ₹50 lakh. For those with minimal cash transactions, the limit increases to ₹75 lakh.

Presumptive Taxpayers: Small businesses under Section 44AD and professionals under Section 44ADA can avoid audits if they declare profits as per presumptive rates. However, if profits fall below these prescribed levels or income crosses the basic exemption limit, a tax audit becomes mandatory.
Importantly, once a taxpayer opts out of presumptive taxation, they cannot re-enter the scheme for the next five assessment years.

Why was the deadline extended?

The CBDT said the extension was necessary after disruptions caused by floods and natural disasters slowed compliance in multiple states. Professional bodies had also escalated concerns, and some High Courts took note of taxpayers’ difficulties.

The extension gives both taxpayers and auditors breathing space to complete statutory requirements without rushing.

Common misconceptions

Experts caution that many taxpayers misinterpret the rules. For example:

Digital transactions include all non-cash modes like bank transfers and demand drafts, not just UPI or debit cards.

Presumptive schemes do not grant blanket exemption — if profits fall short of presumptive rates, audits still apply.

Frequent switching between presumptive and regular taxation can restrict eligibility and trigger audit requirements in later years.

Forms used for tax audit

Form 3CB & Form 3CD: For taxpayers not required to undergo any other statutory audit.

Form 3CA & Form 3CD: For taxpayers already audited under another law (e.g., the Companies Act). The tax auditor refers to that report and files accordingly.

Penalties for missing audit deadline

Failure to conduct a mandatory tax audit attracts penalties under Section 271B:

0.5% of total sales, turnover, or receipts, or

A maximum of Rs 1.5 lakh, whichever is lower.

However, no penalty will be imposed if the taxpayer can prove a reasonable cause for the failure.

Previous vs new deadline

Earlier due date: September 30, 2025

Revised due date: October 31, 2025

This extension applies to assessees covered under clause (a) of Explanation 2 to sub-section (1) of Section 139 of the Act.

For taxpayers

The extension offers short-term relief, but experts urge taxpayers not to delay compliance. With stricter audit norms and increasing scrutiny of digital transactions, adhering to deadlines and understanding audit requirements is essential to avoid penalties.

The new deadline of October 31, 2025, gives businesses and professionals an additional month to align their accounts — and to ensure that their tax filings withstand regulatory review.