Published 15 October 2026
On 28 September 2026 the Central Board of Direct Taxes issued Circular No. 07/2026, extending the due date for income-tax returns for assessment year 2026-27 by taxpayers whose accounts must be audited, from 31 October to 21 November 2026. Because the tax audit report is due one month before the return, the audit report date moves with it, from 30 September to 21 October 2026. With the audit report now days away, this is what the circular covers, what it leaves untouched, and the order in which the work has to be done.
What does Circular 07/2026 say?
The circular is issued under section 119 of the Income-tax Act, 1961, read with section 536 of the Income-tax Act, 2025, the repeal-and-savings provision that keeps the old Act working for earlier years. For assessment year 2026-27 (previous year 2025-26) it extends the due date for the return of income of the persons in serial number 2 of the table below Explanation 2 to section 139(1) from 31.10.2026 to 21.11.2026. As a consequence, the "specified date" for furnishing the report of audit stands extended to 21.10.2026 under clause (ii) of the Explanation to section 44AB, which ties that date to one month before the return. The CBDT announced the decision in a press release the same day, and the circular is published on the department's website.
Who gets the extension?
Serial number 2 is the audit category: companies, persons other than companies whose accounts must be audited under the Income-tax Act or any other law, and partners of such audited firms. In practice that is every company, every firm or LLP whose accounts are audited, and every proprietor or professional who crossed the section 44AB limits for 2025-26: business turnover above ₹1 crore, or ₹10 crore where cash receipts and cash payments each stay within 5 per cent, and professional receipts above ₹50 lakh, or ₹75 lakh on the same cash condition.
What the circular does not change
- Transfer-pricing cases. Taxpayers who must furnish a report under section 92E in Form 3CEB fall in serial number 1 of the same table, with a 30 November return date. The circular names only serial number 2, so their dates are not moved by it.
- Taxpayers outside the audit category. Their return date fell earlier in the year; the circular gives them nothing new, and a return filed now is a belated return.
- Interest. The circular extends due dates and is silent on interest under section 234A for unpaid tax. Paying the self-assessment tax now removes the question.
- The work itself. Nothing in the circular changes the content of Form 3CD, the audit standards or the documents an auditor needs.
The order of work, from today
- Close the books for 2025-26 and give the auditor the ledgers, bank statements, fixed-asset register, TDS and GST reconciliations and MSME payment details that Form 3CD asks about.
- The auditor uploads the report in Form 3CA or 3CB with Form 3CD on the e-filing portal by 21 October 2026, and the taxpayer accepts it from their own login; an upload that is not accepted is not furnished.
- Pay any self-assessment tax under section 140A before filing.
- File the return by 21 November 2026: ITR-6 for companies, ITR-5 for firms and LLPs, ITR-3 for audited proprietors and professionals.
- Verify the return within 30 days of filing, electronically or by sending the signed ITR-V; an unverified return is treated as not filed.
What happens if you miss the new dates?
Failing to get the accounts audited and furnish the report by 21 October exposes the taxpayer to a penalty under section 271B of one-half per cent of total sales, turnover or gross receipts, or ₹1.5 lakh, whichever is less, unless there was reasonable cause under section 273B. A return filed after 21 November becomes a belated return under section 139(4), which can be filed until 31 December 2026 with a late fee under section 234F of ₹5,000, or ₹1,000 where total income does not exceed ₹5 lakh. A belated return also loses the right to carry forward business and capital losses for the year, so a loss-making company has more at stake than the fee.
The last year under the 1961 Act
Assessment year 2026-27 is the last full year assessed under the Income-tax Act, 1961. From 1 April 2026 the Income-tax Act, 2025 governs, with a single "tax year" in place of the previous year and assessment year, and new section numbers and forms for TDS. That is why the circular cites section 536 of the new Act alongside section 119 of the old one. Returns and audit reports for 2025-26 still use the 1961 Act's forms and sections.
Frequently Asked Questions
What is the last date for the tax audit report for AY 2026-27?
21 October 2026. CBDT Circular 07/2026 of 28 September 2026 extended the return date for audit cases to 21 November 2026, and the audit report is due one month before the return under the Explanation to section 44AB.
Is the ITR deadline extended for every taxpayer?
No. Only for persons in serial number 2 of the table below Explanation 2 to section 139(1): companies, persons whose accounts must be audited, and partners of such firms. Transfer-pricing cases and taxpayers outside audit are not covered.
Does the extension apply to Form 3CEB for transfer pricing?
The circular does not mention it. Transfer-pricing cases are in serial number 1 of the table, with a 30 November return date, and this circular does not change their dates.
What is the penalty for a late tax audit report?
Under section 271B, one-half per cent of total sales, turnover or gross receipts, or ₹1.5 lakh, whichever is less, unless the taxpayer shows reasonable cause under section 273B.
Can a company still file its return after 21 November 2026?
Yes, as a belated return under section 139(4) until 31 December 2026, with a section 234F late fee of ₹5,000, or ₹1,000 where total income is up to ₹5 lakh, and without the right to carry forward business and capital losses.
Sources
CBDT Circular No. 07/2026, F. No. 225/128/2026/ITA-II, dated 28 September 2026 (incometaxindia.gov.in); CBDT press release of 28 September 2026 as reported by All India Radio News on 29 September 2026; Income-tax Act, 1961, sections 44AB, 139(1) with Explanation 2, 139(4), 140A, 234A, 234F, 271B and 273B; Income-tax Act, 2025, section 536.
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