Tax Audit Cases: The ITR Due Date, the Late Fee and the Interest If You Miss It
For businesses, professionals, companies and partners whose accounts are audited, the return for FY 2025-26 is now due on 21 November 2026, and the tax audit report on 21 October, after CBDT's Circular 07/2026. Miss the return date and the cost is more than the ₹5,000 late fee: 1% a month on unpaid tax, the year's business and capital losses lost for good, deductions such as 80-IA refused, and no way back to the old tax regime for the year. Here is each cost from the Income-tax Act's own text, worked out in rupees, with the dates that remain and what changes next year under the 2025 Act.
If your accounts are audited, your income tax return has its own deadline, later than everyone else's. For the year that ended on 31 March 2026 it has just been moved. On 28 September 2026 the Central Board of Direct Taxes (CBDT) put the return due date for audit cases back from 31 October to 21 November 2026, and the tax audit report from 30 September to 21 October. This guide covers who that date applies to and what a late return costs, in rupees, from the Act's own text. Some of those costs can be paid off later. Others cannot be undone. It ends with the dates that are still open, and the section numbers that change next year.
Written on 16 October 2026. Returns for FY 2025-26 (assessment year 2026-27) are filed under the Income-tax Act, 1961, which continues for that year although the Income-tax Act, 2025 came into force on 1 April 2026. The dates are from CBDT Circular No. 07/2026 of 28 September 2026. The fees, interest and penalties are from the department's own text of the 1961 Act, as amended by the Finance Act, 2026. The rules on losses and deductions are also confirmed in the department's ITR-3 validation rules for AY 2026-27. This explains the law. It is not advice on any particular case.
21 October 2026 — tax audit report due · 21 November 2026 — return due for audit cases · ₹5,000 — late fee (₹1,000 at most where income is ₹5 lakh or less) · 1% a month — interest on tax left unpaid, counting part of a month as a whole month · 31 December 2026 — the last day for a late (belated) return · ₹1.5 lakh — the most the penalty for a missing audit report can be.
Who the audit due date applies to
The Finance Act, 2026 rewrote the list of due dates in section 139(1) as a table. CBDT's circular extends the date for the people at serial number 2 of that table:
- every company, whether or not its turnover crosses the tax audit limits, because its accounts are audited under company law;
- any other person whose accounts must be audited under the Income-tax Act or under another law, such as a business or profession above the section 44AB limits, a trust or a co-operative society;
- a partner of a firm whose accounts must be audited, and the spouse of such a partner where section 5A applies.
The last point is the one most often missed. A partner of an audited firm gets the later date for their own return, even when their own income needs no audit.
Two groups are outside the extension. A taxpayer who must file a transfer-pricing report under section 92E is at serial number 1, with a due date of 30 November 2026. The circular does not change that date. A business or profession whose accounts are not audited is at serial number 3, with a due date of 31 August 2026, which has passed.
Not sure whether your accounts need an audit at all? The limits in section 44AB are turnover of ₹1 crore (₹10 crore where cash receipts and cash payments are each within 5%) and professional receipts of ₹50 lakh. Presumptive-scheme cases that declare lower profits are also caught. Presumptive taxation, and when it leads to an audit, is covered here.
The dates, one after another
| Date | What it is | What happens after it |
|---|---|---|
| 21 October 2026 | Tax audit report (Form 3CA or 3CB with 3CD), extended from 30 September | The penalty under section 271B can apply |
| 21 November 2026 | Return due date for audit cases, extended from 31 October | The late fee, interest and the losses described below |
| 30 November 2026 | Return due date for transfer-pricing cases (not extended) | The same consequences |
| 31 December 2026 | Last day for a belated return, and for a revised return without a fee | No belated return can be filed; only an updated return |
| 31 March 2027 | Last day for a revised return, with a fee for revisions after 31 December | A filed return can no longer be revised |
| 31 March 2031 | Last day for an updated return (ITR-U) | No return of any kind for the year |
The belated date of 31 December comes from section 139(4): "three months prior to the end of the relevant assessment year". The revised-return date of 31 March is new this year. The Finance Act, 2026 changed section 139(5) to allow a revision "before the end of the relevant assessment year". The department's help pages confirm that from AY 2026-27 a revision filed after 31 December pays a fee under the new section 234-I. The site's compliance calendar carries every one of these dates, and its "Tax audit" feed can be added to a phone calendar.
Interest: why 21 November, and not 31 October, is the date that counts
Section 234A charges simple interest at 1% "for every month or part of a month" from the day after the due date until the return is filed. It is charged on the tax for the year less advance tax, TDS, TCS and certain reliefs. Explanation 1 to the section defines the due date as the date in section 139(1) "as applicable in the case of the assessee".
Circular 07/2026 extends that due date and makes no exception for interest. CBDT does say so when it wants interest to keep running from the original date. Its 2021 extension, Circular 17/2021, stated that the extended dates "shall not apply to Explanation 1 to section 234A" where the unpaid tax exceeded ₹1 lakh. Its 2022 extension for audit cases, Circular 20/2022, carried no such line, and neither does this year's. Read plainly, a return filed by 21 November carries no interest under section 234A. For a later return, the months are counted from 22 November.
The extension does nothing for interest on advance tax. Section 234B charges 1% a month on any shortfall below 90% of the year's tax, from 1 April 2026 until the tax is paid. Section 234C charges interest for instalments paid late. Both run whatever the return due date is. Every month earlier that the balance is paid saves 1% of it under section 234B. The advance tax calculator works out sections 234B and 234C.
The late fee
Section 234F charges a fee of ₹5,000 for a return filed after the section 139(1) due date. Where total income does not exceed ₹5 lakh, the fee "shall not exceed one thousand rupees". The fee is fixed: it is the same for a return one day late as for one five weeks late. It is paid before the return is filed, along with any tax and interest still due.
What it costs, worked out
Take a proprietor whose accounts are audited. The tax for FY 2025-26 is ₹6,00,000, TDS covered ₹60,000 and advance tax paid was ₹4,20,000, leaving ₹1,20,000 to pay. Advance tax was below 90% of the tax due after TDS (₹4,20,000 against ₹5,40,000), so section 234B applies to the ₹1,20,000. The tax is paid on the day the return is filed.
| Filed on 15 November 2026 (on time) | Filed on 31 December 2026 (belated) | |
|---|---|---|
| Section 234B, 1% a month from 1 April | 8 months: ₹9,600 | 9 months: ₹10,800 |
| Section 234A, 1% a month from 22 November | Nil | 2 months (22 November to 31 December, part month counted whole): ₹2,400 |
| Section 234F late fee | Nil | ₹5,000 |
| Interest and fee in all | ₹9,600 | ₹18,200 |
Five weeks' delay costs ₹8,600 more. Interest under section 234C on the instalments is the same in both columns and is left out. These are the costs that can be paid off. The next section covers the ones that cannot.
What a late return costs for good
Losses. Section 80 lets a loss be carried forward only if it was "determined in pursuance of a return filed" under section 139(3), that is, within the time in section 139(1). The department's ITR-3 rules say the same: on a return filed after the due date, "carry forward of current year losses other than HP loss will not be allowed". On ₹8 lakh of business loss, which would otherwise have been set off against later profits taxed at 30% plus 4% cess, that is ₹2,49,600 of tax given up. Unabsorbed depreciation is not a loss under section 80 and still carries forward.
Deductions. Section 80AC allows the deductions in Part C of Chapter VI-A (profits of infrastructure undertakings, SEZ developers, eligible start-ups, housing projects and the like) only if the return is filed "on or before the due date specified under sub-section (1) of section 139".
The old regime. For an individual or HUF with business or professional income, the new tax regime applies unless the taxpayer opts out "on or before the due date specified under sub-section (1) of section 139", in Form 10-IEA. A proprietor who files late cannot claim the old regime's deductions for the year, however much they would have saved. How to compare the two regimes is explained here.
The audit report, and its penalty
Section 44AB requires the audit report by the "specified date", one month before the return due date: 21 October 2026 this year. If the accounts are not audited or the report is not filed, section 271B lets the Assessing Officer levy a penalty of 0.5% of turnover or gross receipts, or ₹1,50,000, whichever is less. That is ₹50,000 on ₹1 crore of turnover, ₹1,00,000 on ₹2 crore, and the full ₹1,50,000 from ₹3 crore up. Section 273B says no penalty is imposed if the taxpayer proves there was "reasonable cause" for the failure. That is a defence to argue, not a right to rely on.
If the date has passed: belated, revised and updated returns
| Return | Window for FY 2025-26 | Cost |
|---|---|---|
| Belated, section 139(4) | To 31 December 2026 | ₹5,000 fee and section 234A interest; the year's losses, Part C deductions and the old-regime option are lost |
| Revised, section 139(5) | To 31 March 2027, for a return already filed | Free to 31 December; after that, ₹5,000 under section 234-I (₹1,000 where income is ₹5 lakh or less) |
| Updated, section 139(8A) | To 31 March 2031 | Additional tax of 25% of the tax and interest within a year of the end of the assessment year, 50% in the second year, 60% in the third, 70% in the fourth |
An updated return can only add income and tax. It cannot be a return of a loss (with a narrow exception), cannot lower the tax already returned and cannot create or increase a refund. It is also barred once a search or survey has begun, or an assessment for the year is pending or complete. On ₹1,50,000 of tax and interest, an updated return filed by 31 March 2028 adds ₹37,500, and one filed in the fourth year adds ₹1,05,000.
Next year: the same rules under new section numbers
From tax year 2026-27, returns are filed under the Income-tax Act, 2025. Its section 263 keeps the same table of due dates. Audit cases file by 31 October 2027, after a tax audit report under section 63 by 30 September 2027. Transfer-pricing cases file by 30 November. A belated return is allowed "within nine months from the end of the relevant tax year" and a revision within twelve months. The department's mapping utility gives the new numbers for each rule above:
| Rule | Income-tax Act, 1961 (FY 2025-26) | Income-tax Act, 2025 (from tax year 2026-27) |
|---|---|---|
| Return and due dates | 139 | 263 |
| Tax audit | 44AB | 63 |
| Interest for a late return | 234A | 423 |
| Interest on advance tax | 234B and 234C | 424 and 425 |
| Late fee | 234F | 428 |
| Penalty for no audit | 271B | 446 |
| Losses need an on-time return | 80 | 121 |
| Deductions need an on-time return | 80AC | 122 |
| New tax regime | 115BAC | 202 |
| Tax on an updated return | 140B | 267 |
The Act 2025 translator maps every old section to its new number.
A short checklist before 21 November
- Upload the audit report by 21 October, and make sure the taxpayer accepts it on the portal; a report waiting for acceptance is not yet filed.
- Pay the balance tax as early as possible. Each month earlier saves 1% of it under section 234B.
- Decide the regime and, if the old regime is wanted, file Form 10-IEA before the return.
- Claim any Part C deduction and carry forward any loss in a return filed by the due date.
- Partners of an audited firm: file your own return by 21 November too.
- Transfer-pricing cases: your date is still 30 November.
If a refund is due, filing on time also protects the interest on it. How refund interest and refund delays work is covered here.
Frequently Asked Questions
What is the ITR due date for tax audit cases for AY 2026-27? 21 November 2026. CBDT Circular No. 07/2026 of 28 September 2026 extended it from 31 October 2026 for companies, other persons whose accounts must be audited, and partners of audited firms.
What is the tax audit report due date for AY 2026-27? 21 October 2026. The audit report is due one month before the return due date, so it moved with the return from 30 September 2026.
Does the extension apply to transfer-pricing cases? No. Taxpayers who must file a report under section 92E are at serial number 1 of the due-date table, with a due date of 30 November 2026. The circular extends only serial number 2.
What is the late fee for filing a tax audit return after the due date? ₹5,000 under section 234F, or at most ₹1,000 where total income does not exceed ₹5 lakh. The fee is the same whether the return is a day late or several weeks late.
How is interest under section 234A calculated? At 1% simple interest for every month or part of a month from the day after the due date to the date of filing. It is charged on the tax for the year less advance tax, TDS, TCS and reliefs. For a return due on 21 November and filed on 31 December, that is two months.
Will I pay section 234A interest if I file between 31 October and 21 November? On a plain reading, no. The circular extends the due date that section 234A refers to and, unlike CBDT's 2021 extension, makes no exception for interest. Interest on advance tax under sections 234B and 234C is not affected by the extension.
Can I carry forward a business loss if I file a belated return? No. Section 80 allows business and capital losses to be carried forward only from a return filed by the due date. A loss from house property can still be carried forward, and unabsorbed depreciation is not affected.
What is the penalty for not filing the tax audit report? Up to 0.5% of turnover or gross receipts, capped at ₹1,50,000, under section 271B. No penalty is levied if there was reasonable cause for the failure (section 273B), which the taxpayer must show.
What is the last date to file a belated return for FY 2025-26? 31 December 2026. After that, the only way to file for the year is an updated return, which can only add income and carries additional tax of 25% to 70%.
Until when can a return for FY 2025-26 be revised? Until 31 March 2027, under section 139(5) as amended by the Finance Act, 2026. A revision filed after 31 December 2026 pays a fee under section 234-I: ₹1,000 where income is ₹5 lakh or less, ₹5,000 otherwise.
The dates and rates above are as at 16 October 2026. CBDT can extend dates again; check the e-filing portal before relying on any of them. Interest and fees are worked out by the return utility on the actual figures. This is an explanation of the law, not tax or legal advice on any case.
Sources
The rules and figures in this article can be checked against these official sources.
- CBDT Circular No. 07/2026 (28 September 2026): return due date for audit cases, AY 2026-27, extended to 21 November 2026; audit report to 21 October 2026 Central Board of Direct Taxes
- Income-tax Act, 1961, as amended by the Finance Act, 2026: sections 44AB, 80, 80AC, 115BAC, 139, 140B, 234A, 234B, 234F, 234-I, 271B and 273B Income Tax Department
- e-Filing help: revised returns to 31 March of the assessment year, and the section 234-I fee after 31 December Income Tax Department
- ITR-3 validation rules for AY 2026-27: losses, Part C deductions and Form 10-IEA on a late return Income Tax Department
- CBDT Circular No. 17/2021 (9 September 2021): an extension that kept section 234A interest running where unpaid tax exceeded ₹1 lakh Central Board of Direct Taxes
- CBDT Circular No. 20/2022 (26 October 2022): extension for audit cases, AY 2022-23, with no exception for interest Central Board of Direct Taxes
- e-Filing portal: returns, refund status, AIS and Form 168 Income Tax Department
- Income-tax Act, 2025, section 263: return of income and its due dates Income Tax Department
- Income-tax Act, 2025, section 63: tax audit Income Tax Department
- Income-tax Act, 2025, section 423: interest for default in furnishing the return Income Tax Department
- Income-tax Act, 2025, section 424: interest for default in payment of advance tax Income Tax Department
- Income-tax Act, 2025, section 428: fee for default in furnishing the return Income Tax Department
- Income-tax Act, 2025, section 202: the new tax regime Income Tax Department
- Old and new section, rule and form numbers: the department’s mapping utility Income Tax Department