CBDT Extends Tax Audit Deadline to October 31, 2025: What Businesses Should Know

The Central Board of Direct Taxes (CBDT) has extended the due date for furnishing tax audit reports for FY 2024–25 (AY 2025–26). The deadline, which was earlier September 30, 2025, has been extended to October 31, 2025. 

CBDT issued the order for assessees covered via clause (a) of Explanation 2 to section 139(1)—i.e., those required to furnish a report of audit under any provision of the Income-tax Act (other than Section 92E). These include companies, partnership firms, and professionals whose turnover or gross receipts cross prescribed limits.

For now, the extension applies only to the audit report. The Income Tax Return (ITR) filing due date remains October 31, 2025, unless a separate circular changes it later.

Why Did CBDT Extend the Tax Audit Deadline?

In late September, the Rajasthan High Court directed the CBDT to consider extending the audit report deadline. This came after several CA associations highlighted practical difficulties. 

Professional bodies such as the Institute of Chartered Accountants of India (ICAI) had also written to the government, pointing to multiple delays. These include late release of audit utilities, schema updates, and heavy portal traffic. Many firms reported difficulties reconciling TDS data and closing books within the earlier deadline.

Using its relaxation powers under Section 119, the CBDT responded by extending the “specified date” mentioned in clause (a) of Explanation 2 to Section 139(1) to October 31, 2025. The move ensures smoother compliance and gives accountants enough time to finalize accurate, error-free reports before uploading them.

Who Should Know About The Tax Audit Extension (And Who It Doesn’t Cover)

The extension applies to businesses or professionals whose turnover, sales, or gross receipts exceed the limits prescribed by the Act.

This includes

• Businesses and professionals that are required to furnish a tax audit report under the Income-tax Act
• Partnership firms with turnover exceeding ₹1 crore (or ₹10 crore if the cash transactions are less than 5%)
• Professionals whose gross receipts are above ₹50 lakh in a financial year

These entities need to prepare and file their audit reports in Form 3CA or 3CB, along with the detailed statement in Form 3CD, which discloses particulars such as depreciation, deductions, and related-party transactions.

The extension does not apply to individual taxpayers or businesses below the audit threshold. Their return filing timeline remains unaffected.

Is the ITR Filing Date Extended Too?

Even though the tax audit report deadline has been extended, the Income Tax Return (ITR) filing date has not. As of now, the last date to file ITRs for audit cases remains October 31, 2025.

This creates a tight overlap. Both the audit report submission and the ITR filing now fall on the same day. Since the audit report forms the foundation for many figures in the ITR, such as profits, depreciation, and disallowances, tax professionals argue that it’s difficult to prepare and file the return on the very same day the audit is completed.

Several Chartered Accountant associations have written to the CBDT requesting that the ITR deadline be extended to November 30, 2025. This request was raised to restore the one-month gap that usually exists between audit and return filing. The Gujarat High Court has also sought clarification on this point, noting that the intent of the Act’s Explanation 2 to Section 139(1) was to ensure reasonable spacing between the two deadlines.

Step-by-Step Guide: What Businesses and Auditors Should Do Now

Here’s a quick checklist for businesses, accountants, and auditors to stay compliant without chaos:

For Businesses:

• Update and reconcile records early: Match invoices, ledgers, and bank statements
• Verify tax data: Ensure TDS credits in Form 26AS and AIS are accurate
• Review indirect taxes: Reconcile GST returns with purchase and sales registers
• Coordinate internally: Keep finance, HR, and audit teams aligned on pending entries or adjustments

For Auditors:

• Batch your audits: Prioritize larger or more complex clients early in October
• Monitor schema updates: Track new audit utilities or format revisions on the IT portal
• Test uploads early: Avoid last-day congestion by filing reports a few days before the 31st October 2025
• Document issues: Keep notes on portal glitches or delays to support extension appeals later

What are the Charges and Penalties for Missing Tax Audit Deadline

If taxpayers fail to submit their audit report or ITR within the prescribed time, the Income-tax Act imposes specific penalties and interest. Here’s a quick breakdown of the key provisions:

1. Penalty for not filing the Tax Audit Report (Section 271B)

• A penalty of 0.5% of total sales, turnover, or gross receipts, or ₹1.5 lakh, whichever is less
• The penalty may be waived if the taxpayer proves that the failure was due to reasonable cause, such as natural calamity, illness, or unavoidable circumstances

2. Late Filing Fee for ITR (Section 234F)

• If ITR is filed after the due date but before December 31, a late fee of ₹5,000 applies
• If filed after December 31, the fee increases to ₹10,000
• For taxpayers with total income below ₹5 lakh, the late fee is restricted to ₹1,000

What Lies Ahead — Risks, Reactions, and Expectations

The extension eases workload pressure but introduces new coordination challenges.

1. Key Risks and Concerns

• Same-day deadlines: Both audit and ITR filings are now due on October 31, leaving no buffer for revisions
• Portal overload: High traffic near the deadline could cause upload errors