Two audit-side developments matter for FY 2025-26 filings.
1. The 60 tax-audit cap (from 1 April 2026)
ICAI guidance keeps a limit of 60 tax audits per member per year, in individual and partnership capacities, and it cannot be shared across a firm's partners. Certain presumptive audits (44AD/44ADA/44AE) are excluded from the count.
2. Tighter MSME reporting in Form 3CD
Revised Clause 22 needs structured reporting of MSME payments — tied to Section 43B(h), which disallows a deduction for amounts owed to micro/small enterprises beyond the permitted window until actually paid. Auditors now expect businesses to continuously verify MSME status of suppliers and track payment timelines.
A CA firm has 3 partners and 200 audit clients. Under the cap, that's up to 60 × 3 = 180 tax audits — but the cap can't be pooled, so if one partner has capacity and another is full, the firm still can't exceed each member's own 60.
For clients: book your audit early — capacity is genuinely limited near the deadline.
The practical takeaway for a business isn't the cap itself — it's Clause 22. Build a simple list of which suppliers are Udyam-registered micro/small enterprises now, and pay them inside the 15/45-day window. Do that and your audit is smooth; skip it and expect disallowances.
Not sure how this applies to you?
Rules change and the answer depends on your exact numbers. Get a qualified professional to review the ICAI audit cap and Form 3CD MSME reporting for your case — before you act.
Talk to a KyaTax expert →Frequently asked questions
Does the 60-cap affect me as a business?
Indirectly — plan your audit early, as your CA has a fixed annual limit.
What does Clause 22 now require?
Detailed reporting of MSME payment timelines linked to 43B(h). Your books must identify MSME suppliers and payment dates.
How do I know if a supplier is micro/small?
Check their Udyam registration; keep a record and ask for written confirmation if unsure.
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