Statutory Audit vs Tax Audit: Who Needs Which, Thresholds, Forms and Due Dates
Statutory audit vs tax audit: Companies Act audit for every company vs section 63 tax audit above ₹1 crore (₹10 crore if cash under 5%). Form 26 explained.
Short answer
A statutory audit under the Companies Act is compulsory for every company every year, regardless of turnover, and reports to shareholders on the financial statements. A tax audit under section 63 of the Income-tax Act 2025 applies to any business with turnover above ₹1 crore (₹10 crore if cash dealings stay within 5%) or professionals above ₹50 lakh.
- Statutory audit applies to
- All companies; LLPs above ₹40 lakh turnover or ₹25 lakh contribution
- Tax audit law
- Section 63, Income-tax Act 2025 (formerly 44AB)
- Tax audit business threshold
- ₹1 crore, or ₹10 crore if cash within 5%
- Tax audit profession threshold
- ₹50 lakh
- Tax audit report form
- Form 26 from tax year 2026-27 (replaces 3CA/3CB/3CD)
- AY 2026-27 tax audit due date
- 21 October 2026, extended
What is the difference?
A statutory audit is required by the law that governs the entity. Every company must have its financial statements audited under sections 139 and 143 of the Companies Act 2013, and an LLP must do so under the LLP Rules once turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh. The auditor reports to members on whether the accounts give a true and fair view.
A tax audit is required by the Income-tax Act for any person carrying on business or profession above the thresholds, whether company, firm, LLP or proprietor. The tax auditor reports to the tax department on compliance with tax provisions, in a prescribed form.
Side-by-side comparison
The table compares the two audits for a company that crosses the tax audit threshold. Both can be done by the same chartered accountant, but they produce separate reports for different readers.
| Factor | Statutory audit | Tax audit |
|---|---|---|
| Law | Companies Act 2013 or LLP Act | Income-tax Act 2025, section 63 |
| Applies to | All companies; LLPs above thresholds | Any business above ₹1 crore (₹10 crore if cash within 5%); professions above ₹50 lakh |
| Purpose | True and fair view for members | Compliance with income-tax law |
| Appointed by | Shareholders at AGM (first auditor by board) | Taxpayer |
| Report to | Members | Income-tax department |
| Report format | Audit report, CARO where applicable | Form 26 from tax year 2026-27 |
| Filed with | AOC-4 to Registrar | Online on income-tax portal |
| Due date | Before AGM; AOC-4 within 30 days of AGM | Before the specified date; 21 October 2026 for AY 2026-27 |
| Who can audit | Chartered accountant or firm | Chartered accountant in practice |
What changed in 2026?
The Income-tax Act 2025 moved the tax audit to section 63, keeping the familiar thresholds. The Income-tax Rules 2026 introduced Form 26 under Rule 47, which replaces Forms 3CA, 3CB and 3CD from tax year 2026-27. Reports for the year ended 31 March 2026 still follow the 1961 Act forms.
For assessment year 2026-27, CBDT Circular 7/2026 extended the tax audit report due date to 21 October 2026 and the return due date for audit cases to 21 November 2026. Under the 1961 Act, failure to get a tax audit attracted a penalty of 0.5% of turnover, up to ₹1.5 lakh.
Which do you need?
Many businesses need both audits in the same year. These rules help identify which audits apply to your entity for a given year, though borderline cases should always be checked with your auditor.
- Private limited company, any turnover: statutory audit every year.
- Company with turnover above ₹1 crore (or ₹10 crore with minimal cash): statutory audit and tax audit.
- LLP below ₹40 lakh turnover and ₹25 lakh contribution: no statutory audit; tax audit only if section 63 applies.
- Proprietor or partnership firm: no statutory audit; tax audit above the section 63 thresholds.
- Professional earning above ₹50 lakh in receipts: tax audit, unless covered by presumptive taxation exemptions.
Related services
Sources
- Tax audit under section 63 of the Income-tax Act 2025 (Ebizfiling)
- Form 26 tax audit report under Income-tax Rules 2026 (ClearTax)
- CBDT Circular 7/2026 extending tax audit and ITR due dates
- LLP audit applicability and limits (Tally Solutions)
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
Does a company with turnover below ₹1 crore need a tax audit?
Usually not, unless it opts out of a presumptive scheme in specified cases. It still needs a statutory audit under the Companies Act.
Can the statutory auditor also do the tax audit?
Yes. The same chartered accountant can conduct both, though each produces a separate report.
What is Form 26?
Form 26 is the new tax audit report under Rule 47 of the Income-tax Rules 2026, replacing Forms 3CA, 3CB and 3CD from tax year 2026-27.
What is the tax audit due date for AY 2026-27?
CBDT extended it to 21 October 2026, with the return due date for audit cases extended to 21 November 2026.