ICAI trampled norms on tax audit accountants who can accept | Mint

New Delhi: Accounting Rule Maker Institute for Chartered Accountants of India (ICAI) on Wednesday said it changed the norms on the maximum number of tax audits that a chartered accountant could do in a year to ensure the quality of tax audits and prevent tax avoidance and evasion. ICAI said certain amendments will apply to the existing limit of 60 tax audit orders a Chartered Accountant (CA), from 1 April 2026. That is, even if the audit assignment is for an earlier review year, it will be counted in the total assignments accepted in a financial year for determining the limit. Income Tax Act requires tax audits for certain classes of taxpayers. This 60 limit would be the total limit of all tax audits accepted and signed by a member, both in his individual capacity and as a partner of a firm or firm, Icai said. Although an individual CA cannot sign more than 60 tax audit reports in a financial year, the revised tax audit report in the event of the review of the tax audit report will not be taken into account for accounting for the limit. Audit assignments, with effect from April 1, 2026, the limit on the number of tax audit orders per partner in a CA firms is not distributed or shared among the partners. “In fact, if there are two partners, it will not be allowed one of the partners to sign more than 60 tax audit reports in a financial year using the limit available to the other partner,” Icai said. This is a significant change from April compared to the current position where it is allowed for a partner to use the limit of another partner and sign over 60 tax audits, Icai said. Considering that the requirements in Form 3CD, a detailed statement that must be submitted to the Income Tax Department with the Tax Audit Report, increase each year, it is necessary for the member to spend adequate time on investigation and verification of accounts to confirm that the details are true and correct, the ICAI statement says. “If members spend sufficient time, taxpayers will be discouraged from adopting tax avoidance and tax evasion measures. In fact, the reason for change is to ensure the quality of tax audit and prevent tax avoidance and evasion. This will eventually facilitate effective tax administration by the government,” the statement says. In a separate development, ICAI said it introduced an ‘alternative dispute resolution center’- the Icai International Adre (IIAC). It is the strategic entry of ICAI to alternative dispute resolution, which plays an important role in crossing commercial, legal and economic interests of the country. “In this developing operating ecosystem, effective dispute resolution is no longer a procedural formality; it is a strategic necessity, and IIAC is aimed at providing this necessity of credibility, neutrality and efficiency, values that are at the heart of Icai’s professional ethos,” Icai said, with President Charanjot Singh Nanda.