ICAI w.e.f. 01.04.2026 puts a limit of 60 number of tax audit assignments u/s 44AB of the Income Tax Act, 1961 by a chartered accountant.
The Chartered Accountants (Limit on Number of Tax Audits) Guidelines, 2025. ICAI w.e.f. 01.04.2026 has notified a limit of 60 as the number of tax audit assignments by chartered accountants.
ICAI vide its announcement dated 11-02-2014 had announced its Council’s decision to enhance the limit of Tax Audits from existing 45 numbers to 60 numbers w.e.f. FY 2014-15 and onwards. As per the announcement, the reasons stated for this increase is enhancement of professional competence due to Information technology enabled environment. It is notable that audits conducted under Section 44AD, 44ADA and 44AE of the Income tax Act, 1961 shall not be taken into account for the purpose of reckoning the specified number of tax audit assignments.
In 2024, the Hon’ble Supreme Court had upheld the competence of ICAI to impose a restriction on the maximum number of tax audits that could be accepted by a Chartered Accountant u/s 44AB in a Financial Year. The ICAI was also directed to consider to enhance the specified number of tax audits.
The highlights of the Guidelines are as under:
1. A Chartered Accountant in practice shall not accept and sign, in a financial year, more than the “specified number of tax audit assignments” in terms of these Guidelines.
2. In case acceptance and signing of the audit assignments under these Guidelines are spread over in two different financial years, then, the financial year in which the report is signed will be considered for the “specified number of tax audit assignments.
3. Where any partner of the firm is also a partner of any other firm or firms of Chartered Accountants in practice, the number of tax audit assignments which may be taken for all the firms put together in relation to such partner shall not exceed the “specified number of tax audit assignments” in the aggregate.
4. Where any partner of a firm of Chartered Accountants in practice accepts one or more tax audit assignments in his individual capacity, the total number of such assignments which may be accepted and signed by him shall not exceed the “specified number of tax audit assignments” in the aggregate.
5. The tax audit assignments arising out of the requirements under clause (c), clause (d) and clause (e) of section 44AB, in relation to persons covered under section 44AE, 44ADA and 44AD, respectively, shall not be taken into account for the purpose of reckoning the “specified number of tax audit assignments” under these Guidelines.
6. In case of revision of tax audit report, the revised tax audit report shall not be taken into account for the purpose of calculating “the specified number of tax audit assignments”.
7. In the case of a Chartered Accountant in practice or a proprietary firm of Chartered Accountant, “the specified number of tax audit assignments” would be 60 tax audit assignments, in a financial year, whether in respect of corporate or non-corporate assesses.
8. In the case of firm of Chartered Accountants in practice, “the specified number of tax audit assignments” would be 60 tax audit assignments per partner in the firm, in a financial year, whether in respect of corporate or non-corporate assesses.
9. In computing the “specified number of tax audit assignments”, each financial year’s audit would be taken as a separate assignment.
10. In computing the “specified number of tax audit assignments”, the number of such assignments, which he or any partner of his firm has accepted, whether singly or in combination with any other Chartered Accountant in practice or firm of such Chartered Accountants, shall be taken into account.
11. The audit of the head office and branch offices of an entity shall be regarded as single tax audit assignment.
12. The audit of one or more branches of the same entity by one Chartered Accountant in practice shall be construed as only one tax audit assignment.
13. A Chartered Accountant being a part time practicing partner of a firm shall not be taken into account for the purpose of reckoning the tax audit assignments of the firm.
14. A Chartered Accountant in practice shall maintain a record of the tax audit assignments accepted and signed by him in each financial year in the format as may be provided by the Council.
The above guidelines shall supersede all earlier guidelines on this subject with effect from 1.4.2026 onwards. Chapter VI of the Council General Guidelines, 2008 [Council Guidelines No.1-CA(7)/02/2008 dated 8th August, 2008] shall continue to be valid till 31.3.2026.
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