Complete Compliance Calendar for October 2026

GST | Income Tax | TDS/TCS | PF | ESI | MCA | LLP

October 2026 is an important month from a compliance perspective for businesses, professionals and tax practitioners. Along with the routine monthly and quarterly obligations, the month includes the revised tax-audit deadline of 21 October 2026, various GST return due dates, quarterly TDS/TCS requirements, PF and ESI payments, as well as key MCA and LLP-related filings.

This compliance calendar highlights the major statutory requirements that may apply to businesses and professionals during October 2026. Additional entity-specific, state-level and industry-specific compliances should be reviewed separately based on the nature and circumstances of the taxpayer.

📅 1 October 2026

Income Tax – Key Changes Effective from October

A number of amendments and procedural changes under the Income Tax Act, Income Tax Rules and related notifications come into effect from 1 October 2026.

One notable change relates to the purchase of immovable property from a non-resident (NRI). In specified cases, a resident Individual or HUF purchasing property from an NRI will not be required to obtain a TAN solely for complying with the applicable TDS procedure. Instead, the new PAN-based reporting process, including Form 141, becomes applicable.

However, the removal of the TAN requirement does not mean that the underlying TDS obligation has been eliminated. Buyers involved in such transactions should carefully review the revised procedure and applicable reporting requirements before making the payment.

📅 5 October 2026

GSTR-5A – OIDAR Services

GSTR-5A applies to overseas service providers supplying Online Information and Database Access or Retrieval (OIDAR) services to non-taxable persons located in India.

General due date: 20th of the following month.

Taxpayers falling under this category should verify the relevant return period and the applicable filing date on the GST portal before filing.

📅 7 October 2026

TDS/TCS Deposit for September 2026

Tax deducted or collected during September 2026 is generally required to be deposited with the Government by 7 October 2026.

The standard Income Tax compliance timeline requires TDS to be deposited by the 7th day of the succeeding month, subject to applicable exceptions.

Who should review this compliance?

  • Companies
  • Firms and LLPs
  • Other TDS deductors
  • Employers deducting tax from salaries
  • Individuals/HUFs covered by TDS provisions
  • Persons responsible for collecting TCS, wherever applicable

Action point: Reconcile the September TDS/TCS liability with the relevant challans and accounting records before making the payment.

📅 10 October 2026

GSTR-7 – GST TDS Return

GSTR-7 for September 2026

Due date: 10 October 2026

This return is applicable to persons and entities required to deduct TDS under the GST law.

GSTR-8 – GST TCS Return

GSTR-8 for September 2026

Due date: 10 October 2026

This return applies to e-commerce operators who are required to collect TCS under GST.

📅 11 October 2026

GSTR-1 – Monthly Return

GSTR-1 for September 2026

Due date: 11 October 2026

Applicable to regular taxpayers who furnish GSTR-1 on a monthly basis.

The standard monthly GSTR-1 filing date is the 11th of the succeeding month.

Before submitting GSTR-1, verify:

  • Sales recorded in the books
  • E-invoices
  • Debit and credit notes
  • B2B invoices
  • B2C supplies
  • Export transactions
  • Advances received
  • Amendments
  • HSN-wise details

📅 13 October 2026

GSTR-1 – QRMP Taxpayers

GSTR-1 for July–September 2026

Due date: 13 October 2026

This applies to eligible taxpayers registered under the Quarterly Return Monthly Payment (QRMP) scheme.

For quarterly filers, GSTR-1 is generally due on the 13th of the month following the relevant quarter.

GSTR-5 – Non-Resident Taxable Persons

GSTR-5 for September 2026

Due date: 13 October 2026

GSTR-5 is applicable to registered non-resident taxable persons. For monthly periods covered under the current framework, the prescribed filing date is generally the 13th of the succeeding month.

GSTR-6 – Input Service Distributors

GSTR-6 for September 2026

Due date: 13 October 2026

This return is applicable to registered Input Service Distributors (ISDs).

📅 15 October 2026

EPF Payment & ECR – September 2026

Due date: 15 October 2026

Employers covered under EPF should complete the monthly provident fund contribution, payment and related ECR requirements within the prescribed deadline.

Employer review checklist:

  • New employee additions and exits
  • UAN details
  • Employee wages
  • Employer and employee contributions
  • ECR information
  • Payment status

ESI Contribution – September 2026

Due date: 15 October 2026

Employers covered by the ESI scheme should deposit the applicable contribution for September 2026 within the prescribed period.

📅 18 October 2026

CMP-08 – Composition Scheme

CMP-08 for July–September 2026

Due date: 18 October 2026

Applicable to eligible composition taxpayers who are required to submit the quarterly statement and pay the corresponding tax liability.

📅 20 October 2026

GSTR-3B – Monthly Filers

GSTR-3B for September 2026

Due date: 20 October 2026

Applicable to taxpayers filing GSTR-3B on a monthly basis.

Before filing, taxpayers should reconcile:

Books → GSTR-1 → GSTR-3B → GSTR-2B

Special attention should be given to:

  • Output tax liability
  • Input Tax Credit
  • Reverse Charge Mechanism
  • Credit/debit notes
  • Amendments
  • Interest
  • Late fees
  • Earlier-period adjustments

GSTR-5A – OIDAR Services

For OIDAR service providers covered by the relevant provisions, the applicable monthly GSTR-5A compliance should also be reviewed during this period.

Businesses providing such services should verify the relevant tax period and exact filing date available on the GST portal.

📅 21 October 2026

🚨 Tax Audit Report – Important October Deadline

21 October 2026 is one of the key compliance dates for eligible taxpayers during October.

The tax-audit report deadline for AY 2026-27 has been extended from:

30 September 2026 → 21 October 2026

The extension has been communicated by the CBDT through Circular No. 07/2026 dated 28 September 2026.

Who needs to consider this extension?

The revised date applies to the specified category covered under Sl. No. 2 in the Table below Explanation 2 to Section 139(1), subject to the applicable statutory conditions.

Important compliance distinction

The extension of the tax-audit report deadline should not automatically be treated as an extension for every audit-related form.

Taxpayers should separately verify the due date and applicability of:

  • Tax Audit Report: 21 October 2026 for eligible specified cases
  • Form 10B/10BB: Check applicability and its connection with the relevant audit-report requirements
  • Form 10BD: Separate compliance; it should not automatically be considered covered by the tax-audit extension
  • Transfer Pricing cases: Subject to separate applicable timelines

This distinction is particularly relevant for companies, firms, LLPs, societies and charitable or religious trusts.

📅 22 October 2026

GSTR-3B – QRMP Group 1

Eligible QRMP taxpayers belonging to the applicable Group 1 States/UTs should file:

GSTR-3B for July–September 2026

Due date: 22 October 2026

The applicable QRMP due date depends on the State/UT of the taxpayer’s principal place of business.

📅 24 October 2026

GSTR-3B – QRMP Group 2

Eligible QRMP taxpayers falling under the applicable Group 2 States/UTs should file:

GSTR-3B for July–September 2026

Due date: 24 October 2026

For instance, Haryana falls under the Group 2 classification under the standard QRMP arrangement. Therefore, eligible QRMP taxpayers in Haryana should generally consider 24 October 2026 as the applicable quarterly GSTR-3B deadline.

📅 25 October 2026

ITC-04 – Job Work Reporting

ITC-04 is relevant for manufacturers or principals who are required to report specified details relating to goods sent to or received back from job workers.

For the April–September 2026 period, the relevant filing date is 25 October 2026, subject to the taxpayer’s applicable category and reporting frequency.

Information to reconcile before filing:

  • Goods sent to job workers
  • Goods received back
  • Goods supplied from job-worker premises
  • Job-work challans
  • Pending goods
  • Time limits prescribed under Section 143

📅 30 October 2026

AOC-4 – Financial Statements

AOC-4/AOC-4 XBRL may become due during October for companies whose AGM date results in an October filing deadline.

The statutory filing period is linked to the actual AGM date and applicable provisions. Therefore, 30 October should not be treated as a common due date applicable to every company.

Companies should calculate their filing deadline based on their AGM date and the relevant MCA requirements.

The applicable annual filing forms are available on the MCA V3 portal.

LLP Form 8 – Statement of Account & Solvency

LLPs are required to file Form 8 – Statement of Account & Solvency within the prescribed period following the end of the financial year.

For FY 2025-26, the generally applicable due date is:

30 October 2026

LLPs should complete the required statement, certification and filing formalities before the applicable deadline.

TCS Certificate – Form 27D

Where applicable, the TCS certificate relating to the second quarter should be issued within the prescribed period.

Businesses should verify the applicable certificate requirements under the new Income Tax framework, including the transition from the earlier form numbering.

📅 31 October 2026

Quarterly TDS Statements – Q2

The quarterly TDS statements for July–September 2026 are generally required to be filed by:

31 October 2026

Under the new Income Tax framework, several forms have been renumbered. For example:

  • Form 138 – corresponding to the earlier Form 24Q for salary TDS
  • Form 140 – corresponding to the earlier Form 26Q for specified non-salary resident payments
  • Form 27Q – reporting relating to specified payments to non-residents under the applicable framework

The Income Tax Department prescribes 31 October as the Q2 due date for the relevant Form 138 and Form 140 filings.

TCS Quarterly Statement – Q2

For the period July–September 2026, the quarterly TCS statement in Form 143 is generally due on:

31 October 2026

The applicable TCS collectors should complete the statement after reconciling collections, challans and transaction records.

MSME Form-1 – Half-Yearly Filing

Specified companies having payments outstanding to Micro and Small Enterprises beyond the prescribed period should review their MSME Form-1 reporting requirements for the April–September 2026 period.

October is an important month for the half-yearly reporting cycle.

Companies should verify:

  • Vendor balances
  • MSME registration details
  • Pending invoices
  • Invoice due dates
  • Payments already made
  • Amounts remaining outstanding beyond the prescribed period

📌 October 2026 – GSTR-9 & GSTR-9C Preparation

Although GSTR-9 and GSTR-9C for FY 2025-26 are generally not due in October, this month can be used to begin the annual GST reconciliation process.

GSTN’s framework provides for the annual return and reconciliation statement within the prescribed annual-return timeline, generally linked to 31 December of the subsequent financial year, unless the Government extends the deadline.

Therefore, businesses should begin their FY 2025-26 reconciliation in October rather than waiting until the final month.

Key reconciliation areas:

Books of Accounts

↓

GSTR-1

↓

GSTR-3B

↓

GSTR-2B / ITC

↓

E-Invoices

↓

Credit & Debit Notes

↓

RCM

↓

HSN Summary

↓

GSTR-9 / GSTR-9C

Early reconciliation can help identify differences between accounting records and GST returns before the annual filing deadline.

📊 October 2026 Compliance Calendar – Quick Reference

Date Compliance Period Applicable To
5 Oct GSTR-5A September 2026 OIDAR suppliers, where applicable
7 Oct TDS/TCS payment September 2026 Deductors/collectors
10 Oct GSTR-7 September 2026 GST TDS deductors
10 Oct GSTR-8 September 2026 E-commerce operators
11 Oct GSTR-1 September 2026 Monthly filers
13 Oct GSTR-1 July–September 2026 QRMP taxpayers
13 Oct GSTR-5 September 2026 NRTPs
13 Oct GSTR-6 September 2026 ISDs
15 Oct PF/ECR September 2026 EPF-covered establishments
15 Oct ESI September 2026 ESI-covered establishments
18 Oct CMP-08 July–September 2026 Composition taxpayers
20 Oct GSTR-3B September 2026 Monthly filers
21 Oct Tax Audit Report AY 2026-27 Specified eligible audit cases
22 Oct GSTR-3B July–September 2026 QRMP Group 1
24 Oct GSTR-3B July–September 2026 QRMP Group 2
25 Oct ITC-04 April–September 2026 Applicable job-work cases
30 Oct AOC-4 FY 2025-26 Companies, based on AGM date
30 Oct LLP Form 8 FY 2025-26 LLPs
31 Oct TDS statement July–September 2026 TDS deductors
31 Oct TCS statement – Form 143 July–September 2026 TCS collectors
31 Oct MSME Form-1 April–September 2026 Specified companies

⭐ October 2026 – CA & Tax Professional Action Checklist

Income Tax

☐ Deposit September TDS/TCS by 7 October
☐ Complete outstanding tax-audit work
☐ Submit eligible tax-audit reports by 21 October
☐ Work on audited ITRs considering the applicable extended timeline
☐ Prepare Q2 TDS statements
☐ Prepare the Q2 TCS statement
☐ Review NRI property transactions and the new Form 141 procedure

GST

☐ File GSTR-7
☐ File GSTR-8
☐ Complete monthly GSTR-1
☐ File QRMP GSTR-1
☐ File GSTR-5
☐ File GSTR-6
☐ Submit CMP-08
☐ Complete monthly GSTR-3B
☐ Complete QRMP GSTR-3B
☐ Review and file ITC-04, where applicable
☐ Begin FY 2025-26 GSTR-9/GSTR-9C reconciliation

Payroll

☐ Complete PF payment and ECR
☐ Deposit ESI contribution
☐ Reconcile salary TDS
☐ Review employee master data and payroll records

Companies & LLPs

☐ Review AOC-4/AOC-4 XBRL due dates
☐ Check MGT-7/MGT-7A requirements based on AGM date
☐ Review MSME Form-1 applicability
☐ Complete LLP Form 8
☐ Check ADT-1 filing requirements based on AGM
☐ Review other applicable event-based MCA filings

15 Big Rules and Changes Taking Effect in October 2026

October 2026 is an important month for taxpayers, businesses and professionals from the perspective of income tax, GST, banking and financial compliance. Several new provisions are taking effect this month, while a number of important compliance activities also require attention.

One of the key developments is the extension of the tax-audit and income-tax return deadlines. Meanwhile, the GST sector is preparing for the 57th GST Council meeting, and businesses should also begin their preparation for the FY 2025-26 annual GST return.

Beyond taxation, taxpayers should also take note of changes concerning property purchases from NRIs, UPI charges, EPF, NPS, bank withdrawals, fixed deposits and digital banking records.

Here are the major October 2026 updates that taxpayers and businesses should keep in mind.

1. Tax Audit Due Date Extended to 21 October 2026

A major update for taxpayers and tax professionals is the extension of the tax-audit report deadline for Assessment Year 2026-27.

Through CBDT Circular No. 07/2026 dated 28 September 2026, the due date for furnishing the tax-audit report has been extended from 30 September 2026 to 21 October 2026 for taxpayers falling within the relevant category specified under Explanation 2 to Section 139(1) of the Income-tax Act, 1961.

The related deadline for filing the Income Tax Return has also been shifted from 31 October 2026 to 21 November 2026.

Who can avail of this extension?

It is important to understand that this extension is not applicable universally to every taxpayer or every type of audit report.

In general, the extended timeline applies to taxpayers belonging to the category where the normal ITR due date was 31 October 2026, including:

  • Companies required to get their accounts audited and which do not fall under transfer-pricing provisions.
  • Non-company taxpayers whose accounts are subject to audit under the Income-tax Act or another applicable law, subject to the prescribed conditions.
  • Firms, LLPs and other entities covered by the relevant tax-audit provisions.
  • Partners of firms whose accounts are required to be audited, wherever the applicable conditions are fulfilled.
  • Other taxpayers falling within the relevant category under Explanation 2 to Section 139(1).

A key distinction is transfer pricing. Taxpayers covered by Section 92E follow a separate compliance schedule and are not covered by this particular extension. Their applicable reporting and return deadlines continue according to the transfer-pricing provisions.

What happens to Form 10B and Form 10BB?

Charitable and religious trusts and institutions should also examine the impact of the extended deadline.

Form 10B is the audit report applicable to specified charitable or religious trusts and institutions. Form 10BB applies to other eligible cases. These forms are required to be furnished within the specified timeline linked to Section 44AB.

Accordingly, where the trust or institution falls within the category covered by the revised specified date, the applicable Form 10B or Form 10BB deadline will also move to 21 October 2026.

This should, however, not be confused with Form 10BD.

Form 10BD follows a separate deadline

Form 10BD relates to the statement of donations received by specified charitable institutions. Its normal due date is 31 May immediately following the financial year in which the donations are received.

Therefore, the October tax-audit extension does not change the Form 10BD due date to 21 October.

In summary:

Compliance October 2026 deadline/status
Tax Audit Report – eligible audit cases 21 October 2026
ITR – eligible audit cases 21 November 2026
Form 10B – eligible cases 21 October 2026, where linked to the specified date
Form 10BB – applicable cases 21 October 2026, where applicable
Form 10BD Not covered by the extension; normal due date is 31 May
Form 3CEB – Transfer Pricing Report Not covered by this extension

2. ITR Due Date for Eligible Audit Cases Moved to 21 November

The extension of the tax-audit deadline has also resulted in additional time for filing the Income Tax Return for eligible taxpayers.

The revised deadline has changed from:

31 October 2026 → 21 November 2026

This provides additional time to taxpayers and professionals to complete the audit process, finalise financial statements and file the corresponding income-tax return.

However, taxpayers should remember that this is not a general extension applicable to everyone. Non-audit taxpayers and taxpayers covered by transfer-pricing provisions continue to follow their respective statutory deadlines.

3. 57th GST Council Meeting Scheduled for 7 October 2026

The 57th GST Council meeting, scheduled for 7 October 2026, is another significant development to watch during October.

The meeting is relevant for businesses, taxpayers and GST professionals because various matters concerning GST administration, compliance procedures and taxpayer facilitation may come up for discussion.

However, there is an important distinction between a proposal or recommendation discussed by the GST Council and an actual amendment in GST law.

A GST Council recommendation does not automatically make a new GST rate, rule or compliance requirement effective. Businesses should wait for the relevant notification, circular, amendment or other legal communication before making changes to their accounting and GST compliance processes.

4. Preparation for GSTR-9 and GSTR-9C for FY 2025-26

October is also an important period for businesses to start preparing for their annual GST return for FY 2025-26.

Based on the previous year’s GSTN process, annual-return forms such as GSTR-9 and GSTR-9C are expected to become available during the October period.

Businesses should therefore begin their reconciliation work well before the December deadline instead of waiting until the last month.

Key areas that should be reconciled include:

  • Books of accounts with GSTR-1
  • GSTR-1 with GSTR-3B
  • ITC recorded in books with ITC claimed in GSTR-3B
  • ITC with GSTR-2B
  • Reverse Charge Mechanism transactions
  • Credit and debit notes
  • Amendments reported in later periods
  • HSN/SAC details
  • Exempt, nil-rated and non-GST supplies
  • Refunds and outstanding demands

For FY 2025-26, the annual-return filing deadline is 31 December 2026, subject to the applicable provisions and any subsequent notification. Current professional guidance also refers to the ₹2 crore threshold for GSTR-9 and ₹5 crore threshold for GSTR-9C.

Practical approach: Businesses should use October to start the GSTR-9/9C reconciliation process rather than postponing the exercise until December.

5. New TDS Compliance for Property Purchase from an NRI

From 1 October 2026, an important compliance change applies to certain property transactions involving a non-resident seller.

When a resident individual or HUF purchases an immovable property from an NRI, the buyer-side TDS compliance process is being modified so that the buyer does not have to obtain a TAN solely for this specified TDS compliance.

Under the revised mechanism, PAN-based reporting and the prescribed form, including Form 141, become important.

It is important to understand that the removal of the TAN requirement does not mean that the TDS obligation has been abolished.

Anyone purchasing property from an NRI should therefore verify the following before completing the transaction:

  1. Whether the seller qualifies as a resident or non-resident.
  2. Whether TDS is applicable under the relevant provision.
  3. The correct TDS rate applicable to the transaction.
  4. PAN details of both parties.
  5. The reporting and prescribed-form requirements applicable from 1 October 2026.

Property transactions involving NRI sellers require particular care because incorrect TDS compliance                        can result in interest, fees and other tax-related consequences.

6. EPF Wage Ceiling Revised

Another important development concerns the EPF wage ceiling.

The wage ceiling has been increased from ₹15,000 to ₹25,000, effective from 17 September 2026. As a result, employers may need to consider the revised limit while handling October payroll and the related ECR compliance process.

Employers should review their payroll systems and verify employee eligibility, contribution calculations and ECR information before completing the applicable monthly filing.

7. Revised Charges for NPS Services

NPS subscribers should also take note of the updated charges applicable to various NPS services from October 2026.

The changes may be particularly relevant when opening a new NPS account or reviewing the charges associated with services provided through Points of Presence and other intermediaries.

Subscribers should remember that charges may vary between PoP-based NPS accounts and direct/e-NPS channels. The applicable cost depends on the account-opening and service route.

Therefore, users should refer to the applicable PFRDA/NPS charge structure for their specific account instead of relying only on the headline charge.

8. Disclosure of Interest Rates on Bulk Fixed Deposits

Another banking-related change concerns bulk fixed deposits.

Under the revised framework, banks are required to publish the applicable interest rates for bulk deposits on their websites.

This requirement is more relevant to large depositors, companies and institutions than to individuals holding smaller fixed deposits.

Businesses, trusts and other organisations with significant deposits should therefore check the bank’s published bulk-deposit rates before making a fresh deposit or renewing an existing large deposit.

9. SBI BSBD Accounts: Revised Cash Withdrawal Charges

SBI’s revised service-charge provisions for Basic Savings Bank Deposit (BSBD) accounts are also relevant during October.

Under the revised arrangement, BSBD customers are entitled to a specified number of free cash withdrawals. Charges may apply once the permitted free limit has been exceeded.

The reported revised fee is ₹15 plus applicable GST per transaction after the free withdrawal limit.

Customers who make frequent cash withdrawals should check the free transaction limit applicable to their account and refer to the latest SBI service-charge schedule.

10. Revised SBI ATM Transaction Limits

SBI customers should also review the ATM transaction limits applicable from October 2026.

For certain salary-account customers using ATMs belonging to other banks, the number of free transactions is being revised.

After the applicable free limit is exhausted, charges may be imposed on both financial and non-financial transactions, depending on the nature of the transaction and the relevant service-charge rules.

Customers who regularly use other-bank ATMs should therefore verify their applicable free limit rather than assuming that the previous limit remains unchanged.

11. UPI Merchant Transactions and MDR Changes

Another significant payment-related development involves UPI merchant transactions.

Under the reported changes, merchant transactions above the specified threshold may attract MDR under the revised framework from 15 October 2026.

MDR is primarily a cost associated with merchant payment acceptance. It should not be treated as a general fee imposed on normal person-to-person UPI transfers.

Businesses accepting UPI payments should therefore examine the charges applicable through their acquiring bank or payment service provider and assess the potential impact on transaction costs.

Before making changes to customer pricing or accounting treatment, businesses should verify the final applicable regulatory and implementation instructions.

12. LPG Subsidy and Aadhaar-Based Authentication

Consumers who receive LPG subsidy benefits should ensure that their Aadhaar authentication or e-KYC requirements have been completed wherever applicable.

Those who have already completed the required authentication generally do not need to repeat the process simply because October has begun.

Consumers who have not yet completed the applicable authentication should check the latest instructions issued by their LPG provider to avoid any disruption to eligible subsidy benefits.

13. Greater Recognition of Digital Banking Records

Changes concerning the legal framework for bankers’ books and banking records are also relevant to the financial sector.

From October 2026, the framework provides recognition to electronic, digital and certain cloud-based banking records, subject to the applicable prescribed conditions.

The development reflects the increasing shift from traditional physical banking records to digitally maintained information.

For businesses, it also highlights the importance of maintaining accurate electronic records, proper audit trails and dependable data backups.

14. Updated Process for Delayed Birth and Death Registration

The procedure for delayed registration of births and deaths is also undergoing changes.

Under the revised framework, the authority required to approve a delayed registration can vary depending on the length of the delay.

Therefore, applicants should not assume that the same authority or approval procedure applies to every delayed registration case.

The relevant authority, documents and approval process should be confirmed according to the specific period by which the registration has been delayed.

15. October TDS/TCS Compliance Requirements

October is also an important compliance month for TDS and TCS deductors and collectors, particularly in relation to quarterly compliance for the second quarter.

Businesses should ensure that they have:

  • Deducted TDS correctly.
  • Properly matched and accounted for challans.
  • Verified PAN details.
  • Filed applicable TDS/TCS statements within the prescribed time.
  • Initiated corrections promptly wherever errors are identified.
  • Reconciled Form 26AS, AIS and other relevant records wherever required.

As tax compliance continues to become increasingly digital, businesses should also maintain the underlying supporting documents and records in an organised manner.

16. MCA and Annual Corporate Filing Requirements

October can also be an important compliance period for companies and LLPs, depending on their financial year, AGM date and applicable statutory filing timelines.

Companies should review whether they need to complete filings or compliances such as:

  • AOC-4
  • MGT-7 / MGT-7A
  • MSME-related reporting
  • Director-related compliances
  • Auditor-related filings
  • Other applicable event-based MCA forms

There is no common October deadline that applies to every company. The actual due date depends on the entity’s AGM date, financial year and individual statutory circumstances.

Companies should therefore maintain an entity-specific MCA compliance calendar instead of relying on a standard October deadline.

Key October 2026 Dates at a Glance

Date Important update
1 October 2026 Various banking, NPS, property-TDS and other compliance changes take effect
7 October 2026 57th GST Council Meeting
October 2026 Expected period for GSTR-9 and GSTR-9C availability/preparation for FY 2025-26
15 October 2026 UPI merchant MDR-related implementation
21 October 2026 Extended tax-audit/reporting deadline for eligible taxpayers
21 November 2026 Extended ITR filing deadline for eligible audit cases
31 December 2026 FY 2025-26 annual GST return deadline, subject to applicable provisions

What Should Businesses and Taxpayers Do in October 2026?

October should be viewed not only as a month in which several new provisions take effect, but also as an important preparation period for upcoming compliance deadlines.

Businesses should first determine whether they actually fall within the category eligible for the 21 October tax-audit deadline. Companies, firms, LLPs, trusts, societies and other entities should examine their applicable statutory provisions and return category rather than assuming that the extension automatically applies to them.

Charitable and religious institutions should separately verify their Form 10B or Form 10BB requirements. These should not be confused with Form 10BD, which follows a separate due-date mechanism.

GST-registered businesses should also begin their FY 2025-26 GSTR-9 and GSTR-9C reconciliation once the relevant forms are available on the GST portal. Starting early can help businesses identify discrepancies between books of accounts, GSTR-1, GSTR-3B and input-tax-credit records and resolve them before the annual-return deadline.

Businesses should additionally review October payroll changes, NPS charges, banking service fees, UPI merchant costs and NRI property TDS requirements wherever these are relevant to their operations.

Taking these steps early can help taxpayers and businesses organise their documentation, identify applicable changes and avoid last-minute compliance issues.

New Tax Audit & ITR Deadline: Due Date Extended, Check Latest Update

The Central Board of Direct Taxes (CBDT) has announced a significant extension of the due dates for filing the Tax Audit Report and Income Tax Return for Assessment Year 2026-27. The extension applies to taxpayers who fall under the specified audit category covered by Section 139(1) of the Income-tax Act, 1961.                                     The CBDT issued its press release on 28 September 2026, confirming an extension of the applicable deadlines. The revised timelines are intended to give the affected taxpayers and tax professionals additional time to complete the audit formalities and file their income tax returns.

The Central Board of Direct Taxes (CBDT) has announced an extension of the due date for filing the Return of Income for Assessment Year 2026-27 for taxpayers covered under S. No. 2 of the Table below Explanation 2 to Section 139(1) of the Income-tax Act, 1961.

For such taxpayers, the income tax return filing deadline has been extended from 31 October 2026 to 21 November 2026. Consequently, the specified date for furnishing the tax audit report for AY 2026-27 has also been extended from the earlier date to 21 October 2026.

The CBDT has issued a press release confirming these revised deadlines.

Tax Audit Deadline Revised

According to the CBDT press release, the “specified date” for submitting the audit report under the Income-tax Act, 1961 has been extended for the applicable category of taxpayers.

The original deadline was:

30 September 2026

The new deadline announced by CBDT is:

21 October 2026

Accordingly, taxpayers covered under the specified category will have additional time to complete and furnish their tax audit reports.

The change is especially relevant to taxpayers whose accounts are required to undergo tax audit and to Chartered Accountants responsible for preparing, finalising, and uploading the related audit reports.

Income Tax Return Deadline Also Revised

CBDT has simultaneously extended the Income Tax Return filing deadline for AY 2026-27 for taxpayers falling under the specified category.

The previous deadline was:

31 October 2026

The revised deadline is:

21 November 2026

Therefore, the extension provides additional time for both completion of the audit-report requirements and subsequent filing of the income tax return for the taxpayers covered by the announcement.

Extension Applies Only to the Specified Category

Taxpayers should note that the CBDT announcement does not constitute a blanket extension for all taxpayers.

The press release specifically covers persons referred to at Serial No. 2 in the table under Explanation 2 to Section 139(1) of the Income-tax Act, 1961.

Therefore, taxpayers should verify whether their particular case falls within this specified category before relying on the revised deadlines.

Revised Tax Audit Report Date

The CBDT press release clearly provides that the “specified date” for furnishing the audit report has been shifted from 30 September 2026 to 21 October 2026.

In practical terms, the audit-report deadline is extended first, followed by the revised ITR filing deadline applicable to the specified category.

Particulars Earlier Deadline Revised Deadline
Tax Audit Report – specified date 30 September 2026 21 October 2026
ITR for AY 2026-27 – specified category 31 October 2026 21 November 2026

What Additional Time Can Be Used For

For taxpayers covered by the CBDT announcement, the extended timeline can help provide additional time to:

  • Complete the tax audit process
  • Finalise books and financial records
  • Complete audit-related disclosures and reporting
  • Furnish and upload the audit report
  • Verify tax calculations and liabilities
  • Prepare and review the Income Tax Return
  • Reconcile applicable tax-related information before filing the return

At the same time, taxpayers should remember that this extension is not a universal extension applicable to every taxpayer.

Separate Formal Order or Notification

The CBDT press release also indicates that a separate formal order/notification will be issued to give effect to the revised deadlines.

Taxpayers and tax professionals should therefore refer to the formal CBDT order or notification as well for the detailed operative provisions of the extension.

Key Points at a Glance

The key dates announced in the CBDT press release dated 28 September 2026 for the specified audit category for AY 2026-27 are:

Tax Audit Report:
30 September 2026 → 21 October 2026

Income Tax Return:
31 October 2026 → 21 November 2026

The revised dates apply specifically to the persons covered by the category identified in the CBDT announcement. Therefore, taxpayers should first confirm their eligibility for the extension rather than assuming that the revised deadlines apply to all taxpayers.

TDS on NRI Property Purchase: No TAN Needed from 1 October 2026

NRI Property Purchase: TAN Not Required from 1 October 2026 | New TDS Compliance Rules

CBDT has issued Notification No. 121/2026 dated 22 September 2026, introducing significant procedural changes for TDS compliance when an immovable property is purchased from a non-resident. The amendment is especially relevant for resident Individuals and HUFs who purchase property from an NRI.

The Finance Act, 2026 had already provided that, from 1 October 2026, a resident Individual or HUF will not need to obtain a TAN for deducting tax on consideration paid for the transfer of immovable property to a non-resident. The latest CBDT notification now gives effect to the related changes in the Income-tax Rules and introduces a new reporting mechanism through Form No. 141 along with Schedule E.

The notification, known as the Income-tax (Fifth Amendment) Rules, 2026, will apply from 1 October 2026.

What Changes from 1 October 2026?

Consider a situation where a resident Individual purchases a house in India from an NRI.

Under the earlier compliance framework, TDS had to be deducted on payments made to a non-resident. Since the transaction was covered by the provisions applicable to payments to non-residents, the buyer was required to obtain a TAN for TDS compliance.

The Finance Act, 2026 has now provided relief from this additional requirement.

The amendment was introduced because obtaining a TAN for an individual property transaction can create an unnecessary compliance burden, particularly where a resident Individual or HUF makes only a one-time purchase from an NRI.

Accordingly, the relevant provision has been amended to remove the TAN requirement for eligible resident Individuals and HUFs with effect from 1 October 2026.

An Important Clarification

Removal of TAN does not mean removal of TDS.

This distinction is crucial.

From 1 October 2026, an eligible resident Individual or HUF can deduct the applicable TDS without obtaining TAN. However, the underlying TDS obligation on the payment made to the non-resident seller will continue to apply.

Why Has the Government Introduced This Change?

The amendment addresses the difference in compliance requirements between property purchases from resident and non-resident sellers.

When the Property Seller Is a Resident

For specified property transactions involving a resident seller, an Individual or HUF can comply with the applicable TDS provisions without obtaining TAN, subject to the prescribed conditions and procedures.

When the Property Seller Is a Non-Resident

Property transactions involving an NRI seller are subject to the TDS provisions applicable to payments made to non-residents. Under the earlier framework, this could require the resident buyer to obtain a TAN, even when purchasing only one property.

The 2026 amendment seeks to reduce this additional compliance requirement.

The Budget memorandum explained that the change provides a relaxation from the requirement to obtain TAN for a resident Individual or HUF in cases involving the purchase of immovable property from a non-resident.

Which TDS Provision Applies to Property Purchased from an NRI?

The Income-tax Act, 2025 reorganised the TDS provisions into a tabular structure.

For payments made to non-residents, Section 393(2), Table Serial No. 17 covers specified payments, including amounts chargeable to tax that are not taxable under the head “Salaries.”

Therefore, where a resident Individual or HUF purchases immovable property from a non-resident and the payment is subject to TDS, the relevant framework is:

Section 393(2) → Table Serial No. 17

Section 393(2) Applies — Not the Regular Resident-Property TDS Provision

For a property transaction involving a non-resident seller, the applicable provision is Section 393(2), Table Serial No. 17, rather than the ordinary TDS provision applicable to property purchases from a resident under Section 393(1).

What Did CBDT Notify on 22 September 2026?

The CBDT Notification No. 121/2026 dated 22 September 2026 introduces important procedural amendments relating to TDS on purchases of immovable property from non-residents.

The notification makes changes to Rules 215, 218 and 219 and revises Forms 132 and 141. These amendments will take effect from 1 October 2026.

Broadly, the changes can be divided into four key areas:

  1. TAN exemption for eligible Individuals and HUFs
  2. Procedure for depositing TDS
  3. Reporting of TDS through Form 141
  4. Issuance of TDS certificate through Form 132

Let us look at each change in detail.

1. TAN Will Not Be Required from 1 October 2026

The most significant relief comes from the amendment to Section 397.

A resident Individual or HUF who is required to deduct TDS on consideration paid for the transfer of immovable property to a non-resident will no longer need to obtain a TAN, subject to the conditions prescribed under the law.

The Finance Act, 2026 specifically brought this category within the exemption provided under Section 397(1)(c).

TDS Position Before and After 1 October 2026

Particular Up to 30 September 2026 From 1 October 2026
Buyer Resident Individual/HUF Resident Individual/HUF
Seller Non-resident Non-resident
TDS Applicable Applicable
Relevant provision Section 393(2), Table 17 Section 393(2), Table 17
TAN Required Not required
Reporting Existing non-resident TDS procedure Form 141 – Schedule E
TDS Certificate Existing procedure Form 132

Therefore, the amendment should not be interpreted as an exemption from TDS.

The correct takeaway is:

From 1 October 2026, a resident Individual or HUF purchasing immovable property from a non-resident can deduct the applicable TDS without obtaining TAN.

2. Form 141 Gets a New Reporting Framework

Another significant change introduced through the 22 September 2026 notification relates to Form No. 141.

The existing form has been modified so that it now also covers transactions falling under Section 393(2), Table Serial No. 17.

The notification has specifically added this provision to the heading of Form 141.

More importantly, a new section titled:

Schedule E — TDS on Consideration for Transfer of Immovable Property under Section 393(2), Table Serial No. 17

has been incorporated into Form 141.

This new schedule provides the reporting framework for these transactions after the TAN requirement has been removed.

What Details Must Be Reported in Schedule E?

The newly introduced Schedule E requires detailed information concerning the property, buyers, non-resident sellers and the corresponding TDS transaction.

1. Information About the Property

The buyer will have to provide details such as:

  • Complete address of the immovable property
  • Nature/type of property

The available property categories include:

  • Land other than agricultural land
  • Building or a part of a building
  • Both land and building

These details form part of the newly prescribed Schedule E.

2. Information of All Buyers

Schedule E also requires details of every buyer involved in the transaction.

The information includes:

  • Serial number
  • Buyer’s PAN
  • Buyer’s name
  • Percentage/proportion of the total consideration payable or credited by each buyer

The total proportion reported for all buyers should add up to 100%.

Example of a Joint Property Purchase

Suppose a husband and wife jointly purchase a property.

The reporting could reflect:

  • Husband — 50%
  • Wife — 50%

The form therefore captures the PAN and respective share of consideration for each buyer.

3. Detailed Information About Non-Resident Sellers

Since the transaction involves a non-resident seller, Schedule E requires additional information about each seller/deductee.

The prescribed details include:

  • PAN, where available
  • Name of the seller
  • Status
  • Contact number
  • Email address
  • Foreign residential address
  • Tax Residency Certificate number
  • Tax Identification Number
  • Proportion of the total sale consideration received or debited to each seller

This makes the reporting requirements more detailed than those generally applicable to a standard resident-property TDS transaction.

PAN Alone Is Not Sufficient for an NRI Seller

One of the important points in the amended Form is contained in Note 6.

The prescribed note clarifies that the contact number, email address and foreign address of the non-resident deductee are mandatory, regardless of whether the non-resident has a PAN.

In cases where the non-resident seller does not have a PAN, the specified details relating to the seller’s Tax Residency Certificate (TRC) and Tax Identification Number (TIN) may also be required in accordance with Rule 217 to determine the applicable rate and avoid higher-rate deduction where the prescribed conditions are satisfied.

Therefore, buyers should not assume that the absence of the seller’s PAN automatically means that TDS can simply be deducted at a higher rate.

The new Schedule E has been specifically structured to collect comprehensive information about the non-resident seller and the applicable tax details.

4. Agreement Date and Registration Date

The newly introduced Schedule E also captures important dates related to the property transaction.

The buyer is required to provide:

  • Date of agreement
  • Date of registration, wherever applicable or available

These details help establish the sequence and timing of the property transaction for reporting and TDS purposes.

5. Sale Consideration and Stamp Duty Value

Schedule E specifically requires reporting of two important amounts:

  • Total Stamp Duty Value of the property
  • Total Sale Consideration relating to the property

These figures are relevant for determining the appropriate tax treatment and TDS liability in transactions involving a non-resident seller.

The transaction cannot simply be treated in the same manner as the standard 1% TDS mechanism applicable to purchases from resident sellers. The applicable provisions for payments to a non-resident have to be examined separately.

6. Instalment-Based Property Payments Are Also Included

The new Schedule E recognises that the purchase consideration may be paid in multiple instalments rather than in a single payment.

The buyer must specify whether the consideration is being paid:

  • In a lump sum, or
  • Through instalments

Where payment is made in instalments, the form further requires the buyer to identify whether the payment represents:

  • First instalment
  • Subsequent instalment
  • Final instalment

For a subsequent or final instalment, the acknowledgement number of the earlier filing is also required.

In the case of the final instalment, the form additionally requires the total consideration paid or credited, including the current instalment.

This provision is particularly relevant for NRI property transactions, where the sale consideration may commonly be settled through several payments.

7. Information Relating to the NRI Seller’s Capital Gains

Schedule E does not merely capture payment-related information. It also seeks specific details concerning the tax treatment of the non-resident seller.

The form requires information such as:

  • PAN of the deductee/seller
  • Name of the seller
  • Whether the seller has opted out of the applicable tax regime under Section 202(1), wherever relevant
  • Nature of capital gains arising to the seller

The capital-gain category includes options such as:

  • Long-term capital gains
  • Short-term capital gains, excluding specified gains

This is important because TDS in a transaction involving an NRI is determined with reference to the amount chargeable to tax and the applicable provisions/rate. It is therefore different from simply applying the standard 1% TDS rule used for specified property purchases from resident sellers.

8. Detailed TDS Calculation Information

The new Schedule E also provides for reporting of the actual TDS computation.

The relevant fields include:

  • Proportionate stamp duty value
  • Amount paid or credited through earlier instalments
  • Amount paid or credited in the current transaction
  • Date of payment or credit
  • Amount on which TDS is applicable
  • Applicable TDS rate
  • Certificate number under Section 395(1), where obtained by the deductee
  • Certificate number under Section 395(2), where obtained by the deductor
  • TDS amount deducted
  • Date of TDS deduction

These requirements indicate that Form 141 is designed as a detailed transaction-level reporting statement, rather than being merely a replacement form after the removal of the TAN requirement.

What Happens If the NRI Has a Lower or Nil TDS Certificate?

The new reporting framework also takes into account situations where the non-resident seller has obtained a lower or nil deduction certificate.

Schedule E provides a specific field for the certificate number issued under Section 395(1) when the deductee has obtained such a certificate.

It also provides a separate field for the certificate issued under Section 395(2) where the certificate has been obtained by the deductor.

Therefore, the removal of the TAN requirement does not mean that the lower or nil deduction certificate provisions have been discontinued.

The buyer must still determine the applicable TDS after considering the provisions relevant to the non-resident seller and the amount chargeable to tax.

Payment and Form 141 Compliance Under the Amended Rules

The CBDT notification has also made corresponding amendments to the procedural rules.

Rule 218(3) has been modified to specifically include consideration for the transfer of immovable property covered under Section 393(2), Table Serial No. 17, where the payment or credit is made by a resident Individual or HUF.

A corresponding amendment has also been made to Rule 219(5), which now specifically refers to the same category of transactions.

Therefore, the notification goes beyond simply changing the format of a form. The relevant Rules have also been updated to establish the payment and reporting procedure for these transactions.

Form 132 Also Covers NRI Property Transactions

CBDT has additionally amended Rule 215(1).

The revised provision now covers TDS deducted under:

Section 393(2), Table Serial No. 17

where a resident Individual or HUF deducts tax from consideration payable for the transfer of immovable property.

As a result, Form No. 132 has also been revised.

The amended form specifically covers transactions involving:

Transfer of immovable property by a non-resident to a resident Individual or Hindu Undivided Family.

Thus, from 1 October 2026, the overall compliance process can be understood as:

TDS deduction → Payment and reporting through Form 141 → TDS certificate through Form 132

The key benefit is that an eligible resident Individual or HUF does not need to obtain TAN merely for carrying out this TDS compliance on the purchase of immovable property from a non-resident.

What TDS Rate Applies to Property Purchased from an NRI?

Buyers need to be especially cautious about the TDS rate in these transactions.

A purchase of property from a non-resident seller should not be treated in the same way as the standard property transaction involving a resident seller under Section 393(1), Table Serial No. 3(i), where the specified 1% TDS mechanism applies subject to the prescribed conditions.

For a transaction involving an NRI seller, the relevant provision is:

Section 393(2) — Table Serial No. 17

This provision deals with specified sums chargeable to tax that are paid to a non-resident.

Therefore, it would be incorrect to apply the general statement:

“Property purchase means 1% TDS.”

The 1% mechanism relates to the specified resident-seller property transaction. In an NRI property purchase, the buyer must determine TDS by considering the amount chargeable to tax, applicable tax rates, relevant treaty provisions where applicable, and any valid lower or nil deduction certificate.

How Is TDS Handled in a Joint Property Purchase?

The new Schedule E of Form 141 becomes particularly important where more than one person purchases the property.

For example:

  • Mr. A — Resident Individual — 50% share
  • Mrs. A — Resident Individual — 50% share

If they jointly purchase property from an NRI, Schedule E requires details of each buyer, including:

  • PAN
  • Name
  • Proportion of the total consideration

The same principle applies when there are multiple non-resident sellers. The form requires information relating to each seller/deductee and their respective share of the consideration.

Another important procedural point is that where there is more than one deductor, each deductor is required to furnish a separate form.

This makes buyer-wise reporting particularly important in joint property transactions.

What If the NRI Seller Does Not Have a PAN?

The amended reporting framework also deals with cases where the non-resident seller does not have a PAN.

The following details must be provided:

  • Contact number
  • Email address
  • Address outside India

These details are required irrespective of whether the seller has a PAN.

Where PAN is not available, the prescribed information relating to the seller’s tax residency and identification in the country of residence must also be furnished, wherever applicable, so that the relevant TDS-rate provisions can be properly considered.

Practical Tip for Buyers

A buyer should collect the NRI seller’s required overseas tax information before the transaction is completed.

Waiting until the TDS filing stage may create avoidable compliance issues, particularly where the seller’s PAN, Tax Residency Certificate or Tax Identification Number is required.

Old TDS Framework vs New Framework

Property Purchased by a Resident Individual/HUF from an NRI

Particular Up to 30 September 2026 From 1 October 2026
Buyer Resident Individual/HUF Resident Individual/HUF
Seller Non-resident Non-resident
Applicable provision Section 393(2), Table 17 Section 393(2), Table 17
TDS Applicable, subject to chargeability Applicable, subject to chargeability
TAN Required Not required
Reporting Existing non-resident TDS procedure Form 141 – Schedule E
TDS Certificate Applicable Form 132
Seller information Required More detailed prescribed reporting
Joint purchasers Applicable Buyer-wise details required
Instalment payments Applicable Specifically reported in Schedule E
Lower/Nil deduction certificate Available subject to conditions Available subject to conditions

Why Is CBDT Notification No. 121/2026 Significant?

The change announced in Budget 2026 was the starting point for removing the TAN requirement.

The Finance Act, 2026 amended the relevant provision so that, from 1 October 2026, a resident Individual or HUF purchasing immovable property from a non-resident would no longer need to obtain TAN solely for this TDS obligation.

However, removing TAN also required the government to establish an alternative compliance mechanism.

The transaction still needs to be properly:

  • Reported
  • Linked with the buyer and seller
  • Matched with the property details
  • Accompanied by the applicable TDS payment
  • Reflected in the TDS certificate

The CBDT Notification No. 121/2026 dated 22 September 2026 addresses these procedural requirements by making amendments to the relevant Income-tax Rules and modifying Forms 132 and 141.

The introduction of Schedule E in Form 141 is particularly important because it provides a dedicated reporting structure for transactions covered by Section 393(2), Table Serial No. 17.

Effective From 1 October 2026

The Income-tax (Fifth Amendment) Rules, 2026 come into force from 1 October 2026.

Therefore, the relevant date of the transaction/payment becomes important.

Transactions falling before 1 October 2026

The existing compliance framework, including the applicable TAN requirement, continues to apply.

Transactions falling on or after 1 October 2026

Where a resident Individual or HUF purchases immovable property from a non-resident, TAN will no longer be required under the amended provisions. However, the applicable TDS, payment and reporting requirements will continue.

Practical Checklist for Buying Property from an NRI

Before proceeding with the transaction, a resident Individual or HUF should keep the following information ready.

Buyer Details

  • PAN
  • Name
  • Residential status
  • Share in the property/consideration

NRI Seller Details

  • PAN, if available
  • Name
  • Overseas address
  • Contact number
  • Email address
  • Tax Residency Certificate details
  • Tax Identification Number
  • Share of sale consideration

Property Information

  • Property address
  • Type/nature of property
  • Agreement date
  • Registration date, where available
  • Stamp Duty Value
  • Total sale consideration

TDS Information

  • Previous instalment payments
  • Current payment
  • Date of payment/credit
  • Amount subject to TDS
  • Applicable TDS rate
  • TDS amount
  • Lower/Nil deduction certificate details, where applicable

The new Schedule E provides for reporting of these categories of information.

Key Takeaway

The amendment effective from 1 October 2026 provides procedural relief to resident Individuals and HUFs purchasing immovable property from non-resident sellers.

However, the most important distinction is:

TAN has been removed — TDS has not been removed.

From 1 October 2026, an eligible resident Individual or HUF will not need to obtain TAN merely because TDS is required on the purchase of immovable property from a non-resident under Section 393(2), Table Serial No. 17.

At the same time, the buyer must continue to comply with the applicable TDS provisions and the newly prescribed reporting mechanism through Form 141 with Schedule E, along with the TDS certificate requirements under Form 132.

In Simple Terms

Property purchased from a Resident
→ Section 393(1), Table Serial No. 3(i)

Property purchased from a Non-Resident
→ Section 393(2), Table Serial No. 17

From 1 October 2026
→ Resident Individual/HUF buying from NRI
→ No TAN requirement
→ TDS obligation continues
→ Form 141 + Schedule E reporting
→ Form 132 TDS certificate

Major Rules Changing from 1 October 2026: GST, Tax, UPI, PF & TDS Updates You Need to Know

 Several new rules are scheduled to take effect, important compliance deadlines will fall during the month, and some major policy developments may also emerge.

In particular, people should keep an eye on important updates related to Income Tax, GST, UPI, PF, TDS, Aadhaar, and LPG.

It is important to note that not all of these changes will come into effect on 1 October itself. Some rules will become effective from 1 October, some are important developments taking place during October, while others were introduced in September but may have a more visible practical impact from October onwards.

Let us understand these updates one by one.

1. UPI MDR to Apply from 15 October 2026 — What You Need to Know

One of the major UPI-related developments in October concerns the introduction of a Merchant Discount Rate (MDR) framework.

From 15 October 2026, a new MDR framework will apply to specified Person-to-Merchant (P2M) UPI transactions. For eligible merchant transactions above ₹2,000, the standard MDR will be 0.4%. For transactions of ₹75,000 or more, the maximum MDR will be capped at ₹300 per transaction.

However, this does not mean that customers will have to pay a 0.4% charge on every UPI payment.

Person-to-Person (P2P) UPI transactions will continue to remain free. MDR will also not apply to merchant payments up to ₹2,000 and eligible transactions involving small merchants covered under the zero-MDR framework.

Another important point is that MDR is not a Government tax. It is a merchant-side charge distributed among participants in the payment ecosystem. Banks have also been advised to ensure that merchants do not pass this cost on to customers.

Therefore, if you make a UPI payment of ₹5,000 or ₹10,000, it should not automatically be interpreted as a “0.4% UPI tax” on the customer.

2. Tax Audit: Penalty Risk After 30 September 2026

For businesses and professionals, 30 September 2026 is an important compliance deadline.

For tax audit cases relating to FY 2025-26 (AY 2026-27), the due date for furnishing the tax audit report is 30 September 2026. The Income Tax Department has clarified that tax audits for FY 2025-26 will continue to be governed by the Income-tax Act, 1961, even if the audit report is filed after 1 April 2026.

If the tax audit report is not furnished by 30 September and the Government does not grant any extension, there may be an exposure to penalty under Section 271B.

The penalty is generally:

0.5% of turnover or gross receipts

or

₹1,50,000

whichever is lower.

ITR Due Date for Tax Audit Cases

For regular tax audit cases, the due date for filing the Income Tax Return (ITR) is 31 October 2026. Different deadlines may apply to taxpayers covered by transfer-pricing provisions.

According to the Income Tax Department’s FAQ, for FY 2025-26, the tax audit report is due by 30 September 2026, while the applicable ITR for audit cases is generally due by 31 October 2026.

3. Important GST Council Meeting Scheduled for 7 October 2026

Another major event for GST taxpayers in October is the upcoming 57th GST Council Meeting.

The 57th GST Council Meeting is now scheduled to be held on 7 October 2026 in New Delhi. The meeting was originally planned for 12 September but was later rescheduled. The meeting of GST officials is expected to take place on 5–6 October.

The meeting may discuss several GST process and compliance reforms, including matters relating to ITC rules, GST registration, e-invoicing, refunds, and GST-related litigation.

However, taxpayers should keep one important point in mind:

A discussion or recommendation by the GST Council does not automatically mean that a new GST rule will become effective on the same day.

Where required, any proposed change may need a formal notification, amendment to the rules, or a legislative amendment before it becomes applicable.

Therefore, taxpayers with an existing GST demand, ITC dispute, or statutory compliance deadline should not postpone their existing compliance obligations simply because they are waiting for the 7 October meeting.

4. No TAN Requirement for Property Purchase from an NRI

From 1 October 2026, the TAN requirement for a resident Individual or HUF purchasing immovable property from an NRI for TDS purposes is being removed.

As per Budget 2026, in such transactions the buyer will be able to deduct and report TDS using their PAN. The seller’s PAN will also need to be quoted in the relevant challan-cum-statement.

In simple terms, the earlier mechanism was:

Resident Individual/HUF + NRI Seller → TAN required

From 1 October 2026, the mechanism will be:

Resident Individual/HUF + NRI Seller → PAN-based TDS compliance

It is important to understand that removal of the TAN requirement does not mean that the TDS obligation itself has been abolished. Applicable TDS provisions will continue to apply, and the buyer must comply with the relevant requirements.

This change is particularly relevant for individuals and HUFs purchasing immovable property from NRI sellers.

5. EPF Wage Ceiling Increased from ₹15,000 to ₹25,000

A significant employee-related development concerns EPFO coverage.

The Government has increased the wage ceiling for mandatory EPFO coverage from:

₹15,000 → ₹25,000 per month

The change is effective from 17 September 2026, meaning its practical implications may start appearing in October payroll and subsequent payroll processing. According to the Government, around 51 lakh additional employees could potentially come under EPFO coverage.

This means that a substantial number of eligible employees earning wages between ₹15,000 and ₹25,000 per month may now come within the statutory EPF framework, subject to the applicable scheme provisions.

For example, if the contribution is calculated at 12% on the revised ceiling of ₹25,000:

₹25,000 × 12% = ₹3,000

Under the earlier ₹15,000 ceiling:

₹15,000 × 12% = ₹1,800

This results in a potential difference of:

₹3,000 − ₹1,800 = ₹1,200

However, the actual EPF contribution for an individual employee will depend on the person’s applicable EPF membership status and the relevant provisions of the scheme.

6. Children’s Aadhaar Mandatory Biometric Update — Free Facility Available Until 30 September

Parents should also take note of an important deadline at the end of September.

According to UIDAI, the Mandatory Biometric Update (MBU) for children aged 5 to 17 years is available free of charge until 30 September 2026.

Therefore, if your child’s mandatory biometric update is still pending, it would be advisable to complete it before 30 September, as the special free-of-cost facility is available only until this date.

One important clarification is that this is not the regular Aadhaar authentication process. It refers specifically to the Mandatory Biometric Update, under which biometric details such as the child’s fingerprints, iris scans, and photograph are updated.

7. Aadhaar Biometric Authentication Required for Subsidised LPG

Another important consumer-related development takes effect from October.

From 1 October 2026, domestic LPG consumers will need to complete Biometric Aadhaar Authentication (BAA) to book refills at the regulated retail selling price along with the applicable subsidy.

Consumers who have not yet completed the authentication can reportedly do so through any of the following options:

  • At the time of LPG delivery
  • At the LPG distributor’s showroom
  • Through the relevant Oil Marketing Company’s mobile application

According to the Government, 27.43 crore consumers, or approximately 89.9%, had already completed the authentication. Those consumers do not need to take any further action.

LPG consumers should therefore check whether their Aadhaar biometric authentication has already been completed.

8. TDS and TCS: Key Points to Keep in Mind During October

TDS and TCS compliance will also remain important for businesses during October. With the transition to the new Income-tax Act, taxpayers must be particularly careful not to confuse FY 2025-26 / AY 2026-27 with FY 2026-27 / Tax Year 2026-27.

Compliance relating to income earned during FY 2025-26 (AY 2026-27) will continue to be governed by the Income-tax Act, 1961.

On the other hand, income relating to FY 2026-27 (Tax Year 2026-27) will fall under the framework of the new Income-tax Act, 2025.

The Income Tax Department has provided clarification regarding this transition.

Therefore, while filing TDS/TCS returns, making challan payments, issuing certificates, or completing other related compliances during October, taxpayers should ensure that they select the correct financial year, tax year, applicable Act, and relevant form.

9. Companies Should Also Review Their MCA/ROC Compliance

For companies, October is not limited to tax-related compliance. Depending on the company’s AGM date and applicable provisions, several MCA/ROC filings may also become due during October.

These may include, where applicable:

  • AOC-4 / AOC-4 XBRL
  • ADT-1
  • MSME-related reporting
  • Other event-based ROC filings

The exact due date is not the same for every company. Certain filings depend on factors such as the actual AGM date and the company’s category.

Companies should therefore review their MCA compliance calendar before the beginning of October and identify all applicable filing deadlines.

10. Do Not Miss Regular GST and Other October Compliance Deadlines

The GST Council meeting is not the only GST-related development to watch in October. Regular GST return filing and tax payment obligations will continue to apply according to their respective due dates.

Taxpayers should not assume that the 7 October GST Council meeting will automatically postpone existing GST return or tax payment deadlines.

Accordingly, GSTR-1, GSTR-3B, CMP-08, and other applicable GST compliances should continue to be completed within their respective due dates, unless the Government officially announces a specific extension.

October 2026: Major Updates at a Glance

Update Important Date Who Is Affected?
TAN requirement removed for resident Individual/HUF purchasing property from an NRI 1 October 2026 NRI property buyers
Aadhaar Biometric Authentication for LPG 1 October 2026 Eligible subsidised LPG consumers
57th GST Council Meeting 7 October 2026 GST taxpayers and businesses
UPI MDR framework 15 October 2026 Specified merchant transactions
PF wage ceiling increased from ₹15,000 to ₹25,000 17 September 2026; impact on October payroll Eligible employees and employers
Free Aadhaar MBU facility for children ends 30 September 2026 Children aged 5–17
Tax Audit Report due date 30 September 2026 Tax audit cases
ITR due date for audit cases 31 October 2026 Tax audit cases

Conclusion

October 2026 is more than just the beginning of a new month. It brings several important compliance requirements, regulatory developments, and financial updates that may affect taxpayers, businesses, employees, and consumers.

Before October begins, it is therefore important to prepare a checklist covering GST returns, tax audit, ITR filing, TDS/TCS, PF, Aadhaar, LPG requirements, MCA/ROC filings, and other applicable compliances.

Keeping track of the relevant dates and completing the required actions on time can help taxpayers and businesses stay up to date with the applicable rules.

FY 2025-26 Tax Audit: 30 September Deadline Remains Unchanged — What CAs Should Do

Tax Audit Deadline 30 September 2026: No Extension Yet — What CAs Should Do Now

With the 30 September 2026 tax audit deadline approaching, Chartered Accountants across India are closely watching for one key development: will the government extend the deadline or will 30 September remain the final date?

As of 21 September 2026, there has been no official CBDT notification announcing an extension.

Current Tax Audit Due Date — No Extension Announced

For FY 2025-26 / AY 2026-27, the current compliance position is:

Compliance Due Date
Tax Audit Report — Form 3CA/3CB-3CD under Section 44AB 30 September 2026
ITR filing for taxpayers subject to audit 31 October 2026
Transfer Pricing cases — Form 3CEB under Section 92E Audit: 31 October 2026 / ITR: 30 November 2026

At present, no notification has been issued changing these dates.

For AY 2026-27, the Income-tax Act, 1961 continues to apply. The new Income-tax Act, 2025 applies prospectively from FY 2026-27. Therefore, the applicable tax-audit provisions, including Section 44AB and the existing Section 271B penalty framework, continue to be relevant for FY 2025-26.

Who Is Required to Get a Tax Audit?

The major tax-audit thresholds can be summarized as follows:

Category Basic Limit Enhanced Limit*
Business under Section 44AB ₹1 crore ₹10 crore
Profession under Section 44AB ₹50 lakh —
Business under Section 44AD where presumptive provisions are not followed ₹2 crore ₹3 crore
Profession under Section 44ADA where presumptive provisions are not followed ₹50 lakh ₹75 lakh

*Enhanced limits are subject to the prescribed conditions relating to cash receipts and payments, including the 5% threshold.

These limits should always be checked against the specific facts and applicable provisions.

Why Is There a Demand for More Time?

Several practical difficulties have contributed to requests from professional bodies for an extension.

1. A Tight Compliance Calendar

For taxpayers who are not covered by tax audit, the ITR deadline was 31 August 2026. The tax-audit report deadline follows on 30 September, while ITR filing for audit cases is generally due on 31 October.

This creates a particularly busy period for tax professionals during August, September and October.

2. Transition to the New Income-Tax Law

FY 2025-26 / AY 2026-27 is an important transition period.

Although the new Income-tax Act, 2025 comes into operation from FY 2026-27, AY 2026-27 remains governed by the Income-tax Act, 1961.

Accordingly, tax audits for FY 2025-26 continue to involve the existing framework, including Forms 3CA/3CB and Form 3CD.

This makes it important for professionals to ensure that the correct provisions and forms are being applied to the correct assessment year.

3. Availability of Forms and Utilities

Professional associations have also highlighted delays concerning the availability of certain return forms and utilities.

Tax audit work involves more than reviewing accounting records. Information reported during the audit often needs to be reconciled with the taxpayer’s return and related schedules.

4. Extensive Reconciliation and Reporting

Tax auditors need sufficient time for activities such as:

  • Reviewing financial information
  • Reconciling accounting and tax records
  • Verifying supporting documents
  • Preparing and reviewing Form 3CD
  • Checking applicable tax positions
  • Collecting confirmations and other evidence
  • Completing professional review and authentication

The Chartered Accountants Association, Jalandhar, has referred to these additional requirements while seeking an extension of the deadline to 31 October 2026.

5. Client Information May Arrive Late

Another practical challenge is the timely receipt of complete information from clients.

Depending on the nature of the business, auditors may need:

  • Final books of accounts
  • Bank statements
  • GST records
  • TDS/TCS information
  • Fixed-asset schedules
  • Loan and interest details
  • Related-party information
  • Stock and inventory records
  • Expense ledgers
  • Confirmations and other audit evidence

Consequently, although the statutory deadline is 30 September 2026, the actual time available to complete an audit may be considerably shorter.

6. Filing the Audit Report Is Not the Final Step

Another important point is the approval process.

After the CA electronically submits the tax-audit report, the taxpayer is required to approve it through the income-tax e-filing account.

Therefore, leaving the entire process until 30 September can create additional risk if there are portal problems, approval delays or other technical issues.

Practical Approach: Work With 30 September as the Deadline

The safest approach for practitioners is to plan on the basis that 30 September 2026 remains the applicable deadline.

If the CBDT subsequently announces an extension, it can provide additional breathing room. Until then, an extension should not be treated as part of the working plan.

What Could Happen If the Deadline Is Missed?

Failure to complete a tax audit within the applicable time limit can have financial and compliance consequences.

Section 271B Penalty

The existing Section 271B framework provides for a penalty of:

0.5% of turnover or gross receipts, subject to a maximum of ₹1,50,000.

However, Section 273B provides relief where the taxpayer can establish reasonable cause for the failure.

Such relief should not be assumed automatically. Appropriate evidence and documentation of the circumstances are important.

Possible Consequences for Delayed ITR Filing

A delayed tax audit can also affect the subsequent ITR filing process.

Depending on the taxpayer’s circumstances, delayed filing may result in interest under Section 234A on unpaid tax and may have implications for the carry-forward of certain losses.

9-Day Action Plan for CAs

With limited time remaining, practitioners can consider the following workflow:

1. Prioritize the Pending Client List

Review all pending audits immediately and categorize clients according to complexity, outstanding information and the amount of work remaining.

2. Resolve Reconciliation Issues Early

Focus on major reconciliation areas such as:

  • AIS
  • Form 26AS
  • GST data
  • GSTR-2B
  • GSTR-3B
  • TDS/TCS records

These issues can consume significant time if left until the final days.

3. Complete Supporting Documentation in Parallel

Form 3CD annexures, management representations and supporting documents should be completed alongside the audit instead of waiting until the final review stage.

4. File Reports as They Become Ready

Where an audit is complete, consider filing the report promptly rather than accumulating completed reports for the final two days.

5. Identify High-Risk Delays

If a client is unlikely to provide the required information or complete the process on time, identify the issue immediately and maintain proper documentation regarding the circumstances.

6. Record Portal Problems

If technical difficulties occur on the e-filing portal, maintain appropriate records such as screenshots, error messages and relevant timestamps.

Such documentation may be useful when explaining the circumstances behind a delay.

Frequently Asked Questions

Has the tax audit deadline been extended to 31 October 2026?

No official extension has been announced as of 21 September 2026. The currently applicable tax-audit deadline remains 30 September 2026.

Practitioners should verify the latest CBDT notification before relying on any extension.

Is this the same extension given for AY 2025-26?

No. The extension applicable to AY 2025-26 was part of the previous assessment year’s compliance cycle.

For AY 2026-27, the currently applicable tax-audit deadline is 30 September 2026, unless the CBDT announces otherwise.

Should taxpayers wait for an extension before completing the audit?

It is prudent to continue preparing on the assumption that 30 September 2026 is the deadline.

If an official extension is subsequently announced, taxpayers and professionals can adjust their timelines accordingly.

Final Takeaway

At present, the 30 September 2026 tax-audit deadline remains unchanged.

With only a limited number of working days available, CAs should focus on completing pending audits, obtaining client information, resolving reconciliations and filing reports as soon as they are ready.

Plan for 30 September. Treat any future extension as additional time rather than something to depend upon.

Disclaimer: This article is intended for general informational purposes and reflects publicly available information as of 21 September 2026. Taxpayers and professionals should verify the latest CBDT notifications and applicable provisions before taking compliance decisions. For specific cases, consult a qualified tax professional.

57th GST Council Meeting: New Schedule and Important GST Changes Expected

The 57th GST Council meeting, which was originally planned for 12 September 2026, has now been rescheduled to 7 October 2026 in New Delhi. The earlier date coincided with the BRICS Leaderan

 

 

s’ Summit scheduled to take place in New Delhi on 12–13 September.

The October meeting is expected to be significant as the Council may discuss several GST process and compliance reforms following the major GST rate rationalisation carried out in 2025.

Finance Minister Nirmala Sitharaman has indicated that the meeting is likely to consider process-related reforms, including e-invoicing and input tax credit (ITC) provisions. The government has also sought suggestions from industry stakeholders and tax professionals regarding provisions that may be causing unnecessary complexity or inconsistencies.

However, taxpayers should keep one important point in mind:

Issues being discussed or proposed before the GST Council are not changes in law unless they are subsequently implemented through the required legal, notification or rule-making process.

ITC When the Supplier Fails to Pay Tax — Section 16(2)(c)

One of the key concerns under discussion is the difficulty faced by a genuine purchaser when the supplier does not pay the applicable GST to the Government.

Under the existing provisions of Section 16(2)(c), payment of the tax charged on a supply to the Government is one of the conditions associated with claiming ITC, subject to the applicable statutory framework.

This can create difficulties for a bona fide recipient who has:

  • received the goods or services;
  • obtained a valid tax invoice;
  • made payment to the supplier;
  • fulfilled the other applicable ITC requirements;

but the supplier has subsequently failed to properly report or deposit the tax.

Industry representatives have therefore been seeking a mechanism that could protect a bona fide buyer from losing legitimate ITC solely because of a supplier’s default. This issue has been highlighted in discussions and reports ahead of the Council meeting.

Review of Blocked ITC Under Section 17(5)

Another major area of discussion is blocked input tax credit under Section 17(5).

The current provision restricts ITC on certain specified goods and services, subject to prescribed exceptions. These include areas such as certain motor vehicles, food and beverages, health-related services, club memberships and other specified categories.

Industry stakeholders have been requesting a review of some of these restrictions.

Although motor vehicle-related ITC provisions may come up for discussion, taxpayers should not assume that ITC will automatically become available after 7 October. Any change would require the appropriate legal process following a Council recommendation.

Inverted Duty Structure and Refund of Accumulated ITC

The inverted duty structure is another important issue that may receive attention.

An inverted duty situation arises when the GST rate applicable to inputs is higher than the GST rate on the final outward supply. This can result in the accumulation of ITC and create a working-capital burden for businesses.

Industry has been requesting changes to the refund mechanism and treatment of accumulated ITC.

Reports ahead of the meeting have identified refund-related provisions and inverted-duty issues among the matters that could potentially be considered.

This issue can be particularly important for businesses where:

GST on Inputs > GST on Outward Supplies

resulting in a continuous accumulation of unused credit.

GST Registration Process — Proposed Simplification

GST registration is another significant area forming part of the broader process-reform discussion.

Businesses have raised concerns regarding:

  • repeated submission of documents;
  • differences in requirements between jurisdictions;
  • physical verification procedures;
  • delays in registration;
  • difficulties in cancellation;
  • additional scrutiny faced by genuine businesses.

The Government has also been working towards a more standardised registration mechanism for larger businesses, particularly businesses having monthly ITC exceeding ₹2.5 lakh.

Simplification of GST Cancellation

The GST registration cancellation process is also expected to be considered as part of the broader reform exercise.

The objective of such reforms would be to make registration and cancellation procedures more streamlined and automated, helping genuine taxpayers avoid unnecessary procedural delays.

E-Invoicing — Possible Expansion and Process Reforms

E-invoicing is another important subject because the Finance Minister has specifically referred to it as part of the GST process-reform agenda for the October meeting.

There has been discussion regarding the possibility of extending e-invoicing to a broader group of taxpayers, including consideration of its applicability to composition taxpayers.

The GST Council may therefore examine further expansion of the e-invoicing framework along with related procedural improvements.

Utilisation of ITC Across Multiple GST Registrations

Another issue that has attracted industry attention is the treatment of unused ITC across different GST registrations of the same business.

For instance, a company may have GST registrations in:

Delhi | Haryana | Maharashtra | Punjab

It may have significant unused ITC under one registration while another registration has an output tax liability.

Under the existing GST framework, the electronic credit ledger of one State registration cannot simply be transferred to another State registration.

Industry has therefore been seeking possible mechanisms to deal with stranded or unutilised ITC across multiple registrations.

Greater flexibility in the utilisation of surplus ITC has been identified in reports as one of the issues that could be considered by the Council.

Online Gaming — Resolution of Legacy GST Issues

Online gaming is another area involving significant legacy disputes and litigation.

Industry stakeholders have been seeking possible solutions for legacy tax issues and ongoing disputes relating to the earlier GST treatment of online gaming.

Reports ahead of the meeting have identified the regularisation of legacy positions in the online gaming sector as one of the concerns that industry may place before the GST Council.

Key Takeaway for Taxpayers

The 57th GST Council meeting on 7 October 2026 could bring discussions on several important GST process reforms, including ITC rules, blocked credits, inverted-duty refunds, registration and cancellation, e-invoicing, cross-registration ITC utilisation and legacy online gaming issues.

However, taxpayers should distinguish between industry representations, proposals and Council discussions and actual changes in GST law.

Any proposal will become applicable only after the necessary recommendation, notification, amendment or rule-making process is completed.

“The GST Council may consider ways to resolve or regularise legacy disputes and pending litigation related to the online gaming sector.”

Compensation Cess — Issue of Stranded ITC

Another significant issue emerging after the GST rate rationalisation is the treatment of unused input tax credit related to compensation cess.

Industry stakeholders have raised concerns regarding compensation cess credit that remains embedded in existing inventory, particularly in sectors such as automobiles.

According to reporting by The Indian Express, automobile dealers have accumulated considerable ITC associated with the now-discontinued compensation cess and are seeking clarity on how this credit should be treated.

The issue is therefore particularly relevant to:

Automobile Dealers + Tobacco Businesses + Other Sectors Affected by the Transition from Compensation Cess

“The treatment of unutilised compensation-cess credit remains an important issue that industry expects the GST Council to examine.”

Another Key Issue: GST Litigation

The October meeting is increasingly being viewed as a process-reform-focused meeting, with reducing unnecessary GST litigation forming an important part of the broader reform agenda.

Finance Minister Nirmala Sitharaman has invited industry stakeholders and professionals to highlight GST provisions that may be creating unnecessary complexity, inconsistencies or anomalies.

The objective is to identify areas where procedural improvements or clarification could make GST compliance simpler and potentially reduce avoidable disputes and litigation.

New UPI Rules 2026 Explained: What Does the 0.4% Charge Mean for Customers?

UPI Payment Rules From 15 October 2026: What You Need to Know

From 15 October 2026, the UPI payment framework is set to undergo an important change. Under the new arrangement, certain Person-to-Merchant (P2M) UPI transactions may attract a Merchant Discount Rate (MDR).

However, this should not be misunderstood as a 0.4% fee that every customer must pay when making a UPI payment above ₹2,000.

The proposed framework primarily concerns the MDR applicable on the merchant side. Person-to-Person (P2P) transactions will continue to remain free, while eligible small merchants will be covered by the applicable MDR exemption.

Let us understand the changes in simple terms.

What Will Change in UPI From 15 October 2026?

Under the new framework, eligible P2M UPI payments exceeding ₹2,000 will have a standard MDR of 0.40%, subject to the applicable rules and exemptions.

A maximum MDR limit of ₹300 per transaction will apply.

This means that once an eligible transaction reaches ₹75,000 or more, the MDR will be restricted to the maximum cap of ₹300 instead of continuing to increase at 0.40%.

Illustrative Examples

UPI Payment Standard MDR Merchant-Side MDR
₹2,000 0% ₹0
₹3,000 0.40% ₹12
₹5,000 0.40% ₹20
₹10,000 0.40% ₹40
₹50,000 0.40% ₹200
₹75,000 0.40%, subject to cap ₹300
₹1,00,000 0.40%, subject to cap ₹300

Important: The above MDR amounts relate to the merchant/payment ecosystem. They should not be treated as an additional UPI transaction fee that customers have to pay separately.

Will Customers Be Charged 0.4% on UPI Payments?

No.

This is the key point to understand.

MDR is a charge associated with the merchant side of the payment ecosystem. Under the stated framework, customers are not separately required to pay MDR as a UPI transaction charge, and the payment ecosystem is expected to prevent merchants from transferring this charge directly to customers.

For instance, if you purchase goods worth ₹10,000 from a shop and pay through UPI, it does not mean that you will have to pay:

₹10,000 + ₹40 as a UPI charge

Where applicable, the ₹40 represents the MDR within the merchant/payment ecosystem rather than an additional amount to be collected from the customer.

Understanding the Difference Between P2P and P2M UPI Payments

UPI transactions can broadly be divided into two categories: P2P and P2M.

1. P2P – Person to Person

A P2P transaction occurs when one individual sends money to another individual through UPI.

Examples include:

  • Sending ₹5,000 to a friend
  • Transferring ₹20,000 to a family member
  • Sending ₹80,000 to another individual

Such P2P transfers will remain free under the new MDR framework.

2. P2M – Person to Merchant

A P2M transaction takes place when an individual makes a UPI payment to a business or merchant.

Examples include:

  • Grocery stores
  • Restaurants
  • Retail outlets
  • Online merchants
  • Other eligible businesses

For eligible P2M transactions above ₹2,000, a standard 0.40% MDR may apply, subject to the relevant exemptions, conditions and maximum cap.

Therefore, the introduction of merchant-side MDR should not be confused with a 0.4% UPI fee payable by every customer.

Examples of P2M Merchants

Common examples include:

  • Grocery stores
  • Restaurants
  • Retail businesses
  • Online sellers
  • Other eligible merchants and service providers

For eligible P2M transactions above ₹2,000, a standard 0.40% MDR may apply, subject to the relevant exemptions, conditions and applicable transaction caps.

What Happens to UPI Merchant Payments Up to ₹2,000?

Eligible merchant transactions of up to ₹2,000 will continue to have 0% MDR.

For example:

₹1,000 payment → ₹0 MDR

₹2,000 payment → ₹0 MDR

However, once the payment exceeds ₹2,000, it is necessary to consider the type of transaction and the merchant’s applicable classification before determining whether MDR applies.

Therefore, it would be incorrect to interpret the headline:

“0.4% charge on UPI payments above ₹2,000”

as meaning that every UPI transaction above ₹2,000 will automatically attract a 0.4% charge.

Small Merchants May Get Significant Relief

The proposed framework also provides an important exemption for eligible small merchants under the relevant P2PM (Person-to-Person Merchant) category.

Eligible small merchants receiving up to ₹1 lakh per month through UPI QR payments directly into their bank account can qualify for an MDR exemption.

This may benefit businesses such as:

  • Small shopkeepers
  • Street vendors
  • Local sellers
  • Small service providers

Example

Suppose a small shopkeeper receives ₹80,000 through UPI QR payments during a month.

If one customer makes a payment of ₹3,000, the merchant will not automatically fall into the standard 0.4% MDR category simply because that individual transaction exceeds ₹2,000.

The merchant’s overall classification and the applicable framework would need to be considered.

Why Is the ₹1 Lakh Monthly UPI Receipt Limit Important?

For determining eligibility for the small-merchant exemption, the merchant’s total monthly UPI QR receipts can be important, rather than looking only at the value of an individual transaction.

Small businesses should therefore keep track of their UPI collections regularly.

If a merchant repeatedly exceeds the prescribed threshold, its classification may change and the standard MDR framework could become applicable. Based on the reported framework, merchants whose UPI receipts remain above ₹1 lakh for three consecutive months may be moved into the P2M category.

For small businesses, this makes the following increasingly important:

UPI Collection Monitoring + Regular Bank Reconciliation

Keeping accurate records can help merchants understand their transaction position and applicable UPI classification.

Maximum MDR of ₹300 on Payments Above ₹75,000

One of the important features of the new framework is the maximum MDR limit of ₹300 per transaction.

The standard MDR rate is:

0.40%

However, the maximum amount that can apply is:

₹300 per transaction

For example:

₹50,000 Payment

₹50,000 × 0.40% = ₹200 MDR

₹75,000 Payment

₹75,000 × 0.40% = ₹300 MDR

₹1,00,000 Payment

₹1,00,000 × 0.40% = ₹400

However, because of the applicable cap, the MDR will be restricted to:

₹300

Some Sectors May Have a Concessional ₹5 MDR

The standard 0.40% rate will not necessarily apply to every merchant category.

Certain specified sectors may receive concessional MDR treatment.

Reported categories include areas such as:

  • Railways
  • Fuel
  • Telecom
  • Insurance
  • Electricity and utility payments
  • Certain public-service transactions

For eligible transactions in these categories, a flat MDR of ₹5 may apply.

Example

Suppose an eligible fuel transaction is:

₹5,000

Under the standard 0.40% calculation:

₹5,000 × 0.40% = ₹20

However, where the transaction falls under an applicable concessional category, the MDR would instead be:

₹5

This does not mean that the customer has to pay the ₹5 separately as a UPI transaction fee.

What About Electricity, Water and Gas Bill Payments?

Certain designated public-utility payments may also receive concessional MDR treatment.

Examples can include eligible payments for:

  • Electricity bills
  • Municipal water charges
  • Piped natural gas

For qualifying transactions above ₹2,000, a flat ₹5 MDR has been reported for applicable categories.

Therefore, a:

₹10,000 electricity bill

does not automatically mean that a standard 0.40% MDR of ₹40 will apply. The applicable category-specific rate must be considered.

What About School and College Fee Payments?

Educational payments may receive separate treatment under the applicable category.

This can include payments such as:

  • School fees
  • College fees
  • University fees
  • Certain examination-related payments

Eligible payments of up to ₹2,000 may remain MDR-free, while transactions above ₹2,000 may be subject to the relevant category-specific concessional or capped MDR rate.

UPI Payments for Mutual Funds and Stock Market Transactions

UPI transactions connected with the capital-market ecosystem may have a separate MDR structure.

Specified transactions involving:

  • Mutual funds
  • Securities
  • Stockbrokers
  • Dealers
  • Investment platforms

have been reported to carry an MDR of 0.02%, subject to a maximum of ₹300 per transaction.

Example

For an eligible capital-market payment of:

₹50,000

the calculation would be:

₹50,000 × 0.02% = ₹10

Therefore, the applicable MDR would be ₹10.

For:

₹1,00,000

the calculation becomes:

₹1,00,000 × 0.02% = ₹20

At ₹15 lakh, the calculated amount reaches ₹300, after which the ₹300 maximum cap would apply.

What About UPI AutoPay and Recurring Transactions?

UPI AutoPay and mandate-based recurring payments are another important area to consider.

Automated payments made through UPI mandates may receive treatment different from the standard MDR framework.

These can include:

  • Mutual fund SIPs
  • OTT subscriptions
  • Utility bills
  • Insurance-related recurring payments
  • EMIs
  • Other recurring mandates

Therefore, it would be inaccurate to state that:

“Every UPI transaction above ₹2,000 will attract 0.4% MDR.”

The nature of the transaction and the payment mechanism also matter.

What About RuPay Credit Card Payments Through UPI?

The new MDR framework should primarily be understood in the context of direct account-to-account P2M UPI payments.

UPI transactions linked to credit products, such as RuPay credit cards or approved credit lines, operate under separate rules applicable to those credit products.

Therefore, a regular bank-account-based UPI payment should not automatically be treated in exactly the same way as a credit-linked UPI transaction.

Will UPI Become Completely Chargeable?

No.

It would be misleading to describe the change simply as:

“UPI will become a paid service from 15 October.”

The proposed change concerns the introduction of an MDR structure for selected merchant-side UPI transactions.

Several categories can continue to receive zero-MDR or concessional treatment, including:

P2P transfers → Free

Eligible merchant payments up to ₹2,000 → 0% MDR

Eligible small P2PM merchants → Zero MDR

UPI AutoPay/mandates → Separate treatment

Certain sectors may also receive concessional MDR rates.

What Does This Mean for Shopkeepers?

Businesses may need to pay closer attention not only to sales accounting but also to the cost associated with digital payments.

In particular, larger merchants may need to:

1. Monitor UPI Collections

Keep track of how much of the business’s total sales are being received through UPI.

2. Verify Merchant Classification

Determine whether the business falls under the P2PM category or the standard P2M category.

3. Reconcile UPI Settlements With Accounts

Actual bank settlements should be matched with sales records and accounting entries.

4. Record Applicable MDR Correctly

Where MDR applies, merchants should appropriately record the charges reflected by their payment ecosystem or banking provider in their accounting records.

5. Avoid Adding a Separate UPI Surcharge to Customers

The applicable framework does not provide for simply passing the merchant-side MDR to customers as a separate “UPI Charge.”

Will Customers Have to Pay ₹12, ₹200 or ₹300 for UPI Payments?

No. These amounts represent examples of merchant-side MDR, not a separate customer UPI fee.

The distinction can be understood as follows:

Payment Amount Example of Applicable MDR Separate UPI Charge to Customer
₹2,000 ₹0 ₹0
₹3,000 ₹12 ₹0
₹50,000 ₹200 ₹0
₹75,000 ₹300 cap ₹0
₹1,00,000 ₹300 cap ₹0

UPI MDR Structure at a Glance

Transaction Category New MDR Treatment
P2P UPI Transfer Free
Eligible P2M payment up to ₹2,000 0%
Standard eligible P2M above ₹2,000 0.40%
Standard P2M transaction of ₹75,000 or more Maximum ₹300
Eligible small P2PM merchants with up to ₹1 lakh monthly UPI QR receipts Zero MDR
Specified essential/utility categories Concessional ₹5 treatment, where applicable
Eligible capital-market transactions 0.02%, maximum ₹300
UPI AutoPay / recurring mandates Separate treatment

Key Points for UPI Users

For regular customers, the following points are particularly important:

✅ No MDR on eligible merchant UPI payments up to ₹2,000

✅ Person-to-Person UPI transfers remain free

✅ Customers are not separately required to pay a 0.4% UPI fee

✅ Standard eligible merchant transactions of ₹75,000 or more are subject to a ₹300 MDR cap

✅ Eligible small merchants may receive an MDR exemption

✅ Fuel, insurance, telecom, railway and certain utility categories may receive concessional treatment

✅ Eligible capital-market transactions may have a separate 0.02% rate

✅ AutoPay and mandate-based payments have separate treatment

Key Points for Shopkeepers

Businesses accepting payments through UPI QR should understand their merchant classification and payment setup before the proposed changes take effect from 15 October 2026.

Merchants should particularly review:

  • Total monthly UPI collections
  • Whether they qualify for the P2PM exemption
  • The merchant category mapped to their QR
  • Transactions that may fall under the standard 0.40% MDR
  • Transactions eligible for concessional rates
  • How MDR appears in bank or payment-provider settlements
  • How UPI charges and settlements should be reconciled in accounting software

Why Is the UPI MDR Framework Being Introduced?

UPI has grown to an extremely large payment network. According to official NPCI statistics, August 2026 recorded around 24.51 billion UPI transactions, with a total transaction value of approximately ₹29.82 lakh crore.

Reports discussing the MDR framework have linked the proposed structure with the need to support the wider UPI infrastructure, cybersecurity, innovation and customer-service ecosystem.

Final Takeaway

The changes proposed from 15 October 2026 should not be interpreted as a blanket charge on every UPI transaction.

The key change is the introduction of an MDR structure for eligible merchant-side UPI payments, with different rates, exemptions and caps depending on the transaction category.

The important figures to remember are:

₹2,000 — threshold
0.40% — standard MDR
₹300 — maximum MDR cap
₹1 lakh/month — small P2PM exemption threshold
₹5 — applicable flat MDR for specified concessional categories
0.02% — eligible capital-market transaction rate

Most importantly:

Customers are not required to pay a separate 0.4% UPI charge simply because their payment exceeds ₹2,000.

Therefore, if you receive a WhatsApp message claiming:

“From 15 October, customers will have to pay 0.4% on every UPI payment above ₹2,000,”

do not forward it without checking the applicable rules and official information.

The proposed changes primarily concern the MDR structure within the merchant and payment ecosystem, rather than making UPI a universally chargeable service for customers.

FY 2025-26: What Is the Late Fee for Delayed Tax Audit—₹75,000 or ₹1,50,000?

Tax Audit Late Fee FY 2025-26: Will It Be ₹75,000 or ₹1,50,000?

There is significant confusion among taxpayers, businesses and tax professionals about the penalty or fee applicable when the Tax Audit Report for FY 2025-26 (AY 2026-27) is filed after the prescribed due date.

The confusion mainly stems from the introduction of the Income-tax Act, 2025, which became effective from 1 April 2026. The new law introduces a different fee mechanism for failure to complete the required tax audit and submit the audit report.

Under the new provisions, the prescribed amounts are:

  • ₹75,000 where the delay is up to one month; and
  • ₹1,50,000 where the delay exceeds one month.

This raises an important question:

If the tax audit report relating to FY 2025-26 is submitted late, will the taxpayer be liable to pay ₹75,000 or ₹1,50,000?

The answer is No — the new ₹75,000 / ₹1,50,000 fee does not apply to FY 2025-26

The reason is that FY 2025-26 corresponds to AY 2026-27, and this year continues to be governed by the Income-tax Act, 1961.

The fact that the audit report may actually be submitted after 1 April 2026 does not by itself shift the audit to the new law.

The new fee provisions apply to Tax Year 2026-27 and later tax years.

Therefore, it is essential to distinguish between FY 2025-26 / AY 2026-27 and Tax Year 2026-27.

1. Understanding the Transition Between the Two Laws

The primary source of confusion is the transition from the Income-tax Act, 1961 to the Income-tax Act, 2025.

FY 2025-26

FY 2025-26 covers income earned from:

1 April 2025 to 31 March 2026

This financial year corresponds to:

AY 2026-27

It continues to be governed by:

Income-tax Act, 1961

Accordingly, the tax audit requirement remains covered by:

Section 44AB

The applicable tax audit forms continue to be:

Form 3CA / Form 3CB along with Form 3CD, wherever applicable.

Tax Year 2026-27

The new tax year covers income earned from:

1 April 2026 to 31 March 2027

This period falls under:

Income-tax Act, 2025

The corresponding tax audit provision is:

Section 63

The tax audit report under the new framework is:

Form No. 26

The new audit provisions and the revised fee mechanism therefore need to be considered separately for Tax Year 2026-27.

2. What Is the New Tax Audit Fee?

Under the Income-tax Act, 2025, the new fee provision is contained in Section 428.

Where a person fails to have the accounts audited and furnish the required audit report in accordance with Section 63, the prescribed fee is:

Delay of up to one month

₹75,000

Delay of more than one month

₹1,50,000

Thus, the new law provides a two-level fee structure depending on the period of delay.

It is also important not to confuse these amounts with the earlier penalty provisions. The new framework treats this amount as a fee, whereas the earlier law provided for a penalty.

3. Is the ₹75,000 Fee Applicable to FY 2025-26?

No.

This is the key point taxpayers need to understand.

Consider a taxpayer who is required to undergo tax audit for:

FY 2025-26 / AY 2026-27

Even if the tax audit report is submitted after 1 April 2026, the new Section 428 fee of ₹75,000 or ₹1,50,000 does not automatically become applicable.

The reason is that the audit relates to FY 2025-26, a year covered by the earlier Income-tax Act.

The transitional provisions ensure that the relevant provisions of the old law continue to apply to such years.

4. What Is the Income Tax Department’s Position?

The Income Tax Department has clarified the treatment of tax audit reports during the transition between the two Acts.

For FY 2025-26, the Tax Audit Report:

  • relates to AY 2026-27;
  • continues to fall under the Income-tax Act, 1961;
  • is required to be furnished using Form 3CA / Form 3CB / Form 3CD, as applicable; and
  • remains governed by the provisions of the old Act even where the report is uploaded after 1 April 2026.

Therefore, the applicable law is not determined simply by looking at the date on which the audit report is actually uploaded.

The crucial factor is the financial year or tax year to which the audit relates.

5. What Happens If the FY 2025-26 Tax Audit Is Delayed?

For FY 2025-26, the consequences of failure to comply with the tax audit requirement continue to be examined under the Income-tax Act, 1961.

The relevant provision is:

Section 271B

Section 271B provides for a penalty where a taxpayer fails to get the accounts audited or fails to furnish the audit report as required under Section 44AB.

The penalty may be calculated as the lower of:

0.5% of total sales, turnover or gross receipts

or

₹1,50,000

Accordingly, the maximum penalty under the old provision is:

₹1,50,000

However, this should not be confused with the new ₹75,000 / ₹1,50,000 fee structure introduced under the Income-tax Act, 2025.

The two provisions operate under different laws and apply to different tax years.

6. Penalty under Section 271B is NOT the same as the new late fee

This distinction is extremely important.

Old Act — FY 2025-26

The consequence is:

Penalty under Section 271B

It is not an automatic fixed late fee of ₹75,000.

The Assessing Officer may impose the penalty subject to the provisions of the Act.

The maximum is generally:

0.5% of turnover/gross receipts or ₹1.50 lakh, whichever is lower.

There is also an important protection under:

Section 273B

Section 273B provides that penalty under certain provisions, including Section 271B, may not be imposed where the taxpayer proves that there was reasonable cause for the failure.

Therefore, for FY 2025-26, the taxpayer should not mechanically calculate:

“Tax audit late by one month = ₹75,000.”

That is not the correct position.

7. What changes from Tax Year 2026-27?

Now consider a tax audit relating to:

Tax Year 2026-27

This period starts on:

1 April 2026

and ends on:

31 March 2027

This is governed by the:

Income-tax Act, 2025

The tax audit requirement is under:

Section 63

and the new tax audit report is:

Form No. 26

For failure to get the accounts audited and furnish the report within the prescribed time, the new fee under Section 428 applies.

Therefore:

Particulars Tax Year 2026-27 onwards
Delay up to one month ₹75,000
Delay beyond one month ₹1,50,000

This is the new regime.

8. Is ₹75,000 charged every month?

No.

This is another important point.

The provision does not say:

₹75,000 per month.

It provides:

Up to one month of delay

₹75,000

Thereafter

₹1,50,000

So it is not a recurring ₹75,000 every month.

For example, if the tax audit report is delayed by:

  • 10 days → ₹75,000
  • 20 days → ₹75,000
  • 30 days → ₹75,000
  • More than one month → ₹1,50,000

The provision should therefore not be interpreted as a monthly late fee.

9. Example — Tax Year 2026-27

Suppose a taxpayer is required to furnish the tax audit report by:

30 September 2027

Case 1 — Report filed on 10 October 2027

Delay = 10 days

Applicable fee:

₹75,000

Case 2 — Report filed on 25 October 2027

Delay = 25 days

Applicable fee:

₹75,000

Case 3 — Report filed on 5 November 2027

Delay exceeds one month.

Applicable fee:

₹1,50,000

Therefore, once the delay crosses the one-month threshold, the higher fee becomes applicable.

10. Example for FY 2025-26

Let us consider a practical example for the current tax-audit cycle.

Assume the taxpayer has:

Financial Year: FY 2025-26

Tax Audit Report Due Date: 30 September 2026

Now suppose the audit report is submitted on:

15 October 2026

The taxpayer should not conclude:

“The report is delayed by 15 days, so I must pay ₹75,000.”

That conclusion would be incorrect.

The Section 428(c) fee introduced under the new Income-tax Act, 2025 does not become applicable to the FY 2025-26 audit simply because the report is uploaded after 1 April 2026.

The audit for FY 2025-26 continues to be governed by the provisions of the Income-tax Act, 1961.

Accordingly, the relevant consequence is considered under the Section 271B penalty framework, subject to applicable provisions, including the reasonable-cause protection available under Section 273B.

11. Why Is There Confusion About the Tax Audit Late Fee?

The confusion surrounding the ₹75,000 and ₹1,50,000 amounts can mainly be attributed to three factors.

Reason 1 — The New Income-tax Act Became Effective From 1 April 2026

The Income-tax Act, 2025 came into effect from 1 April 2026.

As a result, many taxpayers assume that every tax compliance action performed after this date must automatically be governed by the new law.

However, this interpretation is not correct.

The transition provisions determine which law applies to a particular tax year.

Reason 2 — Section 428 Introduces a ₹75,000 Fee

Section 428 of the new Act specifies amounts of:

₹75,000

and

₹1,50,000

for the applicable tax-audit default.

Because these figures are clearly mentioned in the new law, several articles and social-media discussions have described the situation simply as:

“The tax audit late fee is now ₹75,000.”

However, that statement does not provide the complete picture.

The more accurate position is:

The ₹75,000 / ₹1,50,000 tax-audit fee mechanism under the new Act applies to Tax Year 2026-27 and subsequent tax years. It does not become applicable to the FY 2025-26 tax audit merely because the report is filed after 1 April 2026.

Reason 3 — FY 2025-26 and Tax Year 2026-27 Are Being Mixed Up

A major source of misunderstanding is the failure to distinguish between the two periods.

FY 2025-26

1 April 2025 to 31 March 2026

Corresponding assessment year:

AY 2026-27

Applicable law:

Income-tax Act, 1961

Tax Year 2026-27

1 April 2026 to 31 March 2027

Applicable law:

Income-tax Act, 2025

The new provisions, including the revised tax-audit fee mechanism, apply to this new tax year.

Therefore, identifying the year to which the audit relates is essential before determining the applicable late-compliance provisions.

12. Old Tax Audit Rules vs New Tax Audit Rules

The key differences can be summarized as follows:

Particulars FY 2025-26 / AY 2026-27 Tax Year 2026-27 onwards
Applicable Law Income-tax Act, 1961 Income-tax Act, 2025
Tax Audit Provision Section 44AB Section 63
Audit Report Form 3CA / 3CB + Form 3CD Form 26
Consequence of Default Penalty under Section 271B Fee under Section 428
First Amount Not prescribed as a fixed ₹75,000 fee ₹75,000
Higher Amount Maximum penalty can reach ₹1.50 lakh ₹1,50,000
Reasonable Cause Section 273B applies to Section 271B penalty New fee mechanism operates differently
Mandatory ₹75,000 Fee Not applicable Applicable
₹1,50,000 Fee After One Month Not applicable as a Section 428 fee Applicable

The table highlights an important point: although the figure of ₹1.50 lakh appears under both frameworks, the nature and manner of its application are different.

13. Is ₹1.50 Lakh Automatically Payable Under Section 271B?

No.

This is another important point that taxpayers should understand.

Under the old law, Section 271B provides for a penalty calculated as:

0.5% of total sales, turnover or gross receipts

or

₹1.50 lakh, whichever is lower.

Therefore, ₹1.50 lakh represents the maximum statutory limit, and it is not automatically imposed in every case of delayed tax audit.

Example 1 — Turnover of ₹50 lakh

Suppose the taxpayer has turnover of:

₹50 lakh

The calculation would be:

0.5% × ₹50 lakh = ₹25,000

Therefore, based on the statutory formula, the penalty would be capped at the lower applicable amount rather than automatically becoming ₹1.50 lakh.

Example 2 — Turnover of ₹10 crore

Suppose turnover is:

₹10 crore

Then:

0.5% × ₹10 crore = ₹5 lakh

Since Section 271B provides a maximum limit of ₹1.50 lakh, the statutory ceiling would be:

₹1.50 lakh

Thus, under Section 271B, ₹1.50 lakh is the maximum limit and not an automatic penalty amount.

14. New Act Introduces a Different Fee Structure

The mechanism under the new Section 428 is substantially different from the earlier penalty system.

Under the new provision, the prescribed fee is:

₹75,000

where the delay is up to one month,

and:

₹1,50,000

where the delay extends beyond one month.

Unlike the earlier Section 271B framework, this amount is not determined by applying a percentage to turnover.

This represents an important change for taxpayers.

For instance, consider a small business having turnover of only ₹20 lakh. If the business is required to undergo tax audit under the new Act and the audit report is delayed beyond one month, the applicable statutory fee can still be:

₹1,50,000

This is because the new fee is prescribed as a fixed amount and is not linked to the taxpayer’s turnover.

15. Can Reasonable Cause Avoid the New Fee?

Taxpayers and professionals should carefully distinguish between the old and new provisions on this issue.

Under the earlier Section 271B framework, the levy is in the nature of a penalty. Section 273B provides relief where the taxpayer is able to establish a reasonable cause for the failure.

The new Section 428 mechanism, however, is expressly framed as a fee.

Therefore, it should not be assumed that the new ₹75,000 / ₹1,50,000 fee will automatically receive the same treatment as a penalty imposed under Section 271B.

The nature of the levy itself has changed.

Accordingly, for Tax Year 2026-27 onwards, taxpayers should carefully consider the requirements of Section 428 instead of assuming that the earlier reasonable-cause provisions will operate in exactly the same way.

16. What Rules Apply During the Current Tax Audit Season?

For the present tax-audit cycle, the relevant period is:

FY 2025-26 / AY 2026-27

The currently applicable due date for the tax audit report is:

30 September 2026

The Income Tax Department has clarified that the tax audit relating to FY 2025-26 continues to be governed by the Income-tax Act, 1961.

Accordingly, the applicable forms continue to include:

  • Form 3CA, wherever applicable;
  • Form 3CB, wherever applicable; and
  • Form 3CD.

Therefore, the following statement would be incorrect:

“Since the new Act came into force on 1 April 2026, every late tax audit from FY 2025-26 will attract a ₹75,000 fee.”

The applicability of the new fee cannot be determined merely by looking at the date on which the audit report is uploaded.

17. What If CBDT Extends the Tax Audit Due Date?

Another practical consideration is whether the prescribed due date is subsequently extended.

If the CBDT officially extends the FY 2025-26 tax-audit deadline, the compliance position would have to be determined by taking the officially extended due date into account.

Until such an extension is formally notified, taxpayers should follow the applicable statutory deadline.

For the current FY 2025-26 tax-audit cycle, the applicable due date is presently:

30 September 2026

18. Easy Way to Understand the Two Regimes

The entire transition can be remembered using the following comparison:

FY 2025-26

Income-tax Act, 1961
↓
Section 44AB
↓
Form 3CA / 3CB + Form 3CD
↓
Section 271B penalty

Tax Year 2026-27 onwards

Income-tax Act, 2025
↓
Section 63
↓
Form 26
↓
Section 428 fee

The new fee structure is:

Up to one month of delay → ₹75,000

Beyond one month → ₹1,50,000

This distinction is important because the new fee mechanism should not be applied retrospectively to the FY 2025-26 tax audit.

19. Frequently Asked Questions

Q1. Will a ₹75,000 late fee apply to FY 2025-26 tax audit?

No.

The ₹75,000 fee under Section 428 does not apply to the FY 2025-26 tax audit simply because the report is submitted after 1 April 2026.

Q2. Is the amount ₹15,000 or ₹1,50,000 under the new provision?

The applicable higher amount is:

₹1,50,000

It is not ₹15,000.

Q3. From when does the ₹75,000 fee apply?

The ₹75,000 fee is part of the new regime applicable to Tax Year 2026-27 onwards, where the delay in furnishing the tax audit report is up to one month.

Q4. What happens when the delay is more than one month?

Under the new Section 428 mechanism, the prescribed fee becomes:

₹1,50,000

Q5. Is ₹75,000 payable for every month of delay?

No.

The provision does not impose ₹75,000 separately for every month.

The structure provides for ₹75,000 for delay up to one month and ₹1,50,000 thereafter.

Q6. Which provision applies to FY 2025-26?

For FY 2025-26 / AY 2026-27, the Income-tax Act, 1961 continues to govern the tax audit.

The consequences of non-compliance are therefore considered under Section 271B, subject to the applicable provisions of the old Act, including Section 273B.

Q7. Which audit forms are required for FY 2025-26?

For FY 2025-26, the applicable forms remain:

Form 3CA / Form 3CB along with Form 3CD, as applicable.

Q8. What form applies under the new tax-audit regime?

For Tax Year 2026-27 onwards, the new tax-audit report is:

Form No. 26

The new Form 26 replaces the earlier tax-audit reporting structure under the new framework.

Will the Tax Audit Due Date for FY 2025-26 Be Extended to 31 October 2026?

Tax Audit Due Date FY 2025-26 | AY 2026-27 | Latest Extension Update | Form 3CA/3CB/3CD

The tax audit compliance period for FY 2025-26 (AY 2026-27) is currently in progress. Taxpayers, businesses, tax professionals and Chartered Accountants are closely watching the deadline and one question is being discussed widely:

Will the Tax Audit Report due date be extended from 30 September 2026 to 31 October 2026?

As of 13 September 2026, the CBDT has not issued any official notification confirming an extension of the tax audit report filing deadline.

Accordingly, taxpayers and professionals should continue preparing their audit compliance on the basis of the existing 30 September 2026 deadline, unless the CBDT announces a formal extension.

1. What is the Tax Audit Due Date for FY 2025-26?

For FY 2025-26 (AY 2026-27), taxpayers covered under the tax audit provisions are currently required to furnish their tax audit report by:

30 September 2026

The tax audit report is submitted electronically by the Chartered Accountant. After the CA uploads the report, the taxpayer is required to log in to the Income Tax e-filing portal and approve or accept the report.

Current Important Compliance Dates

Compliance Particulars Due Date – FY 2025-26 / AY 2026-27
Non-audit ITR – applicable cases 31 August 2026
Tax Audit Report 30 September 2026
ITR for taxpayers covered by tax audit 31 October 2026
Tax audit with transfer pricing cases 31 October 2026
ITR for transfer pricing cases 30 November 2026

For AY 2026-27, the tax audit report continues to follow the applicable provisions of the existing Income-tax Act framework. The audit report deadline is generally one month before the due date applicable to taxpayers whose accounts are subject to audit.

2. Is the Tax Audit Due Date Extended?

No official extension has been announced so far.

This is an important distinction for taxpayers and professionals.

Various professional organisations, Chartered Accountants and other stakeholders may submit requests or representations seeking additional time. However, simply submitting a representation does not change the statutory deadline.

The due date can be changed only after the competent authority, generally the Central Board of Direct Taxes (CBDT), issues an official notification, order or other legally applicable announcement.

In simple terms:

Representation for Extension ≠ Extension Granted

Therefore, as of 13 September 2026, the 30 September 2026 deadline should continue to be considered the applicable due date for furnishing the Tax Audit Report.

Taxpayers and professionals should not assume that the deadline has been extended to 31 October 2026 unless an official CBDT announcement confirms it.

3. Why are taxpayers and professionals seeking an extension?

Several professional organisations have expressed concerns about the existing tax compliance schedule and the limited time available for completing tax audit-related work.

A key concern is the short interval between the non-audit ITR filing deadline and the tax audit report deadline.

For AY 2026-27, the due date for applicable non-audit business ITRs was 31 August 2026. The current deadline for submitting the tax audit report is 30 September 2026, leaving only one month between the two important compliance dates.

Professional bodies believe that this limited window may not provide sufficient time to complete the extensive audit procedures, reconciliations, verification and reporting requirements involved in tax audits.

For instance, the Chartered Accountants Association, Jalandhar, has requested that the tax audit report filing deadline be moved to 31 October 2026.

In another representation dated 11 September 2026, the Punjab Accountants Association also requested that the existing deadline of 30 September 2026 be extended by one month to 31 October 2026.

4. Delayed availability of ITR Forms and Utilities

The late and phased release of ITR forms and related filing utilities is another important reason cited in requests for an extension.

In its recent representation, the Chartered Accountants Association, Jalandhar pointed out that various ITR forms and utilities required for audit-related taxpayers were made available relatively late during the filing season.

The representation specifically referred to the availability of forms such as:

  • ITR-3
  • ITR-5
  • ITR-6
  • ITR-7

According to the professional body, the delayed availability of these forms and utilities effectively reduced the time available to taxpayers and professionals to prepare and complete audit-related compliances.

This becomes particularly significant for audit cases, where extensive data verification, reconciliation, financial review and tax-related reporting are generally required before the tax audit report can be completed and submitted.

5. Increased Reporting and Disclosure Requirements

Professional associations have also highlighted the growing reporting, disclosure and financial-statement requirements, particularly for non-corporate taxpayers.

The additional requirements mean that taxpayers and Chartered Accountants may need to spend more time gathering and processing detailed financial and tax information.

The information often needs to be:

  • Collected
  • Compiled
  • Reconciled
  • Verified
  • Audited
  • Reported and disclosed
  • Authenticated

As the volume and complexity of reporting increases, the overall workload during the tax audit season also rises for both taxpayers and Chartered Accountants.

These factors are among the key reasons professional bodies are requesting additional time for completing and filing the FY 2025-26 tax audit report.

6. What deadline extension is being sought?

The primary request from professional bodies is to provide additional time for completing the tax audit compliance.

Current deadline

30 September 2026

Proposed extended deadline

31 October 2026

Some representations have also asked for related extensions covering:

  • Form 10B
  • Form 10BB
  • Other audit-related reports
  • ITR filing deadlines applicable to audit cases

The Chartered Accountants Association, Jalandhar, has proposed two alternatives:

Option 1: Extend the Tax Audit Report filing deadline to 31 October 2026.

Option 2: Align the Tax Audit Report deadline with the audit-case ITR deadline, making both deadlines 31 October 2026.

7. Does the New Income Tax Act affect tax audits for FY 2025-26?

This is an important issue because FY 2025-26 represents a transition period between the existing and new income-tax law frameworks.

There has been some confusion regarding whether tax audits for this year should be carried out under Section 44AB of the Income-tax Act, 1961 or the corresponding provision under the new law, Section 63.

Position for FY 2025-26

For FY 2025-26 (AY 2026-27), tax audits continue to be governed by the:

Income-tax Act, 1961

Accordingly, the applicable tax audit report continues to be furnished through:

  • Form 3CA along with Form 3CD, or
  • Form 3CB along with Form 3CD

depending on the nature and circumstances of the taxpayer.

Therefore, taxpayers and professionals preparing tax audits for FY 2025-26 should continue using the applicable 3CA/3CB and 3CD forms under the existing law.

8. Section 44AB vs Section 63 – Which provision applies?

For FY 2025-26 / AY 2026-27, the relevant tax audit provision continues to be:

Section 44AB of the Income-tax Act, 1961

The new Income-tax Act, 2025 contains the corresponding tax audit provisions under Section 63, but the new framework applies to the tax years covered by that legislation.

The distinction can be summarised as follows:

Financial Year / Tax Year Applicable Provision Tax Audit Form
FY 2025-26 / AY 2026-27 Section 44AB – Income-tax Act, 1961 Form 3CA/3CB + Form 3CD
Tax Year 2026-27 onwards Section 63 – Income-tax Act, 2025 Form 26

Therefore, anyone completing a tax audit for FY 2025-26 should not confuse it with the new tax audit reporting framework applicable under the new law.

9. What is the tax audit deadline for audit cases?

For regular taxpayers who are subject to tax audit, the applicable timelines are currently:

Tax Audit Report

30 September 2026

Income Tax Return

31 October 2026

The difference between these two dates is significant. The tax audit report must generally be completed and furnished before the taxpayer proceeds with filing the corresponding audit-case ITR.

If the tax audit deadline is extended, the corresponding ITR deadline may also become a subject of discussion, depending on the nature of the extension announced by the authorities.

10. What is the timeline for Transfer Pricing cases?

Taxpayers who are required to furnish a report under Section 92E follow a different compliance schedule.

Tax Audit / Applicable Audit Report

31 October 2026

Income Tax Return

30 November 2026

Thus, the 30 September 2026 deadline should not be treated as a universal deadline for every taxpayer subject to audit.

Transfer pricing cases have a separate timeline because of the additional reporting requirements applicable to such taxpayers.

11. Who is generally liable for Tax Audit?

For FY 2025-26, tax audit applicability continues to be determined under Section 44AB of the Income-tax Act, 1961.

Broadly, tax audit provisions may apply in the following situations:

Business

Tax audit is generally applicable when the business turnover or gross receipts exceed:

₹1 crore

The threshold can increase to:

₹10 crore

where the prescribed conditions relating to cash receipts and cash payments are satisfied, including the applicable 5% limit.

Profession

For professionals, tax audit generally becomes applicable when gross receipts exceed:

₹50 lakh

Tax audit requirements may also arise in certain situations involving presumptive taxation, particularly where income is declared below the prescribed limits or the relevant conditions of the presumptive taxation provisions are not met.

Therefore, taxpayers should examine their individual facts and applicable provisions before determining whether a tax audit is required.

The Income Tax Department has also indicated that the fundamental turnover and receipt limits applicable to businesses and professionals continue under the relevant tax framework.

12. What are the consequences of filing the Tax Audit Report late?

Not furnishing the Tax Audit Report within the prescribed time may result in a penalty under the applicable provisions of the Income-tax Act.

For FY 2025-26, the relevant penalty provision is Section 271B of the Income-tax Act, 1961.

The penalty may generally be calculated at:

0.5% of sales, turnover or gross receipts

However, the maximum penalty cannot exceed:

₹1,50,000

It is important to note that the penalty provision is subject to the specific facts of each case.

If a taxpayer is able to demonstrate a reasonable cause for the failure, relief from penalty may be available under Section 273B, depending on the circumstances.

Therefore, taxpayers should not assume that a possible future extension or a potential reasonable-cause defence automatically removes the need to comply with the prescribed deadline.

13. Should you wait before completing the tax audit?

No. Taxpayers should not wait for a possible extension.

The safest approach is to continue working on the basis that 30 September 2026 is the applicable tax audit deadline.

Taxpayers and professionals should avoid delaying their audit merely because there is speculation that the government may extend the date.

The assumption that:

“The deadline will definitely be extended.”

can create unnecessary compliance risks.

There is a precedent from the previous assessment year. For AY 2025-26, the CBDT extended the specified tax audit report deadline from 30 September 2025 to 31 October 2025.

However, that earlier decision should not be interpreted as confirmation that the FY 2025-26 tax audit deadline has already been extended.

A previous extension does not automatically result in an extension for the current year.

14. Is there still a possibility of a CBDT extension?

Yes, an extension is still possible.

The CBDT has the authority to extend specified statutory compliance deadlines when circumstances warrant such action.

Therefore, the government may announce a revised tax audit deadline in the future.

However, taxpayers should rely only on an official CBDT notification or order.

Until such an announcement is made:

30 September 2026 should continue to be treated as the applicable Tax Audit Report due date.

15. Extension request vs official extension – What is the difference?

Taxpayers should clearly understand the difference between a request for an extension and an extension that has actually been granted.

Step 1 – Representation is submitted

Professional organisations, Chartered Accountants, tax practitioners or other stakeholders submit requests to the CBDT or Ministry of Finance seeking additional time.

⬇️

Step 2 – Government reviews the request

The authorities examine the representations along with technical, administrative and compliance-related issues.

⬇️

Step 3 – Official decision is issued

If the CBDT approves an extension, it issues an official notification, order or formal announcement specifying the revised deadline.

⬇️

Step 4 – Revised deadline becomes effective

Only after the official announcement can taxpayers rely on the extended due date.

Therefore:

“Professional bodies have requested an extension”

does not mean:

“The Tax Audit deadline has been extended.”

The two situations are completely different.

16. Tax Audit Due Date Status as of 13 September 2026

The current position can be summarised below:

Particulars Current Position
Financial Year FY 2025-26
Assessment Year AY 2026-27
Applicable Tax Audit Provision Section 44AB
Tax Audit Forms Form 3CA/3CB + Form 3CD
Existing Tax Audit Due Date 30 September 2026
Extension to 31 October 2026 Not officially announced as of 13 September 2026
Extension requests Yes
Professional bodies seeking extension Yes
Date requested by representations 31 October 2026
Audit-case ITR due date 31 October 2026
Transfer Pricing audit/report deadline 31 October 2026
Transfer Pricing ITR deadline 30 November 2026

Thus, based on the position stated above, taxpayers should continue to consider 30 September 2026 as the operative tax audit deadline unless the CBDT formally announces a change.

17. What action should taxpayers take now?

The practical approach is simple:

Do not wait for an extension announcement.

If your tax audit is still pending, start completing the required work immediately.

A typical preparation process may include:

Finalise books of accounts → Reconcile bank statements → Reconcile GST data → Verify TDS → Check AIS/26AS → Reconcile debtors and creditors → Review fixed assets → Verify loans and liabilities → Check expenses → Complete tax computation → Compile Form 3CD information → Finalise audit report → Obtain taxpayer approval → File the ITR

The objective should be to have the audit report ready for submission by 30 September 2026.

If the CBDT later grants an extension, taxpayers who have already completed their work will simply have additional time available.

On the other hand, if no extension is announced, delaying the audit until the last few days may result in avoidable compliance pressure, errors and filing risks.

Key takeaway

Plan your compliance based on the existing 30 September 2026 deadline. Any later extension should be treated as additional time, not as the deadline you are depending upon.

Final Conclusion

Tax Audit Due Date FY 2025-26: Current Status and Extension Update

As of 13 September 2026, the CBDT has not issued any official notification extending the tax audit deadline for FY 2025-26 (AY 2026-27).

Therefore, the existing tax audit deadline continues to be:

30 September 2026

At the same time, several professional organisations have approached the CBDT and Ministry of Finance seeking additional time and have proposed extending the deadline to:

31 October 2026

The requests for additional time are based on various compliance-related concerns, including the limited time available between important filing deadlines, the phased availability of ITR forms and utilities, and the increased level of audit and reporting work.

For now, taxpayers and tax professionals should follow the existing deadline rather than relying on a possible future extension.

The safest approach is to complete and submit the Tax Audit Report by 30 September 2026. Do not postpone compliance in anticipation of an extension.

If the CBDT subsequently issues an official order extending the deadline, taxpayers can follow the revised date specified in that announcement.

Quick Summary

  • ❌ Has an extension been officially announced? — No
  • 📅 Current Tax Audit Due Date — 30 September 2026
  • 📢 Is an extension being requested? — Yes
  • 🎯 Deadline requested by professional bodies — 31 October 2026
  • ⚠️ Should taxpayers wait for the extension? — No

Current Official Position

The Income Tax Department’s current information indicates 30 September 2026 as the applicable tax audit deadline for FY 2025-26. The existing Forms 3CA/3CB along with Form 3CD continue to apply for the relevant AY 2026-27 tax audits.

Taxpayers should therefore rely on official notifications issued by the Income Tax Department or CBDT for any subsequent change in the deadline.

Disclaimer

This article is intended solely for general informational and educational purposes. It should not be treated as professional tax, legal or financial advice. Taxpayers should independently verify the applicable provisions of the Income-tax Act, rules, circulars, notifications and other official government communications before taking any compliance or financial decision.

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