Section 63
Section 63: tax audit
Section 63 is the Income-tax Act, 2025's tax audit provision, requiring certain businesses and professionals to get their accounts audited by an accountant before a specified date and to furnish the audit report. It is the successor to Section 44AB of the old Act, and its thresholds work together with the books-of-account rule in Section 62 and the presumptive taxation rules in Sections 58 and 61.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
Who must get a tax audit
| Category | Audit trigger |
|---|---|
| Business (general rule) | Total sales, turnover or gross receipts exceed ₹1 crore in the tax year |
| Business, mostly digital transactions | The ₹1 crore threshold is raised to ₹10 crore if cash receipts (including sales/turnover/gross receipts) do not exceed 5% of the total, and cash payments (including expenditure) also do not exceed 5% of the total |
| Profession | Gross receipts exceed ₹50 lakh in the tax year |
| Presumptive-scheme assessee claiming lower profit | Person carrying on business/profession under Section 58(2) or Section 61(2) (Table Sl. Nos. 4 and 5), where profits are claimed to be lower than the deemed profits under those sections |
When Section 63 does not apply
Section 63(2) exempts an assessee from this section's audit requirement where the declared profits and gains of the business or profession are exactly as computed under the presumptive rules of Section 58(2) or Section 61(2).
Filing the audit report and overlap with audits under other laws
Section 63(3) requires the audit report to be furnished by the "specified date," in the prescribed form, duly signed and verified by the accountant, setting out the prescribed particulars.
Section 63(4) allows a person who is required under some other law to get accounts audited to treat that as sufficient compliance with Section 63, provided the accounts of the relevant business/profession are audited under that other law before the specified date, and the audit report is furnished along with the accountant's report in the prescribed form by that date.
Key definitions
- "Specified date" means the date one month prior to the due date for furnishing the return of income under Section 263(1).
- A cheque or bank draft that is not "account payee" is deemed to be a cash payment or receipt, as the case may be, for testing the 5% thresholds.
Frequently asked questions
What is the turnover limit for a compulsory tax audit under Section 63?
₹1 crore for a business, raised to ₹10 crore if both cash receipts and cash payments each stay within 5% of the total. For a profession, the limit is ₹50 lakh in gross receipts.
Do presumptive-taxation assessees need a tax audit?
Not if they declare income exactly as per the presumptive computation under Section 58(2) or Section 61(2) - Section 63(2) exempts them. But if they claim lower actual profit than the deemed figure, an audit is required under Section 63(1) Table Sl. No. 2.
What is the "specified date" for furnishing the tax audit report?
One month before the due date for filing the return of income under Section 263(1), as defined in Section 63(5)(a).
Related sections
Want this applied to your actual filing, not just explained?
Get your tax audit under Section 63 completedLast updated 9 September 2026