Ahmedabad: The Institute of Chartered Accountants of India (ICAI) has imposed a strict ceiling of 60 tax audit assignments per chartered accountant from the financial year 2026-27, tightening scrutiny over the manner in which audits are allocated within partnership firms. The regulation, coming into force on April 1, 2026, will cover all tax audits carried out under Section 44AB of the Income-tax Act, 1961.With the onset of the new financial year, the 60-audit cap will operate as a cumulative annual limit for every member, irrespective of whether the audits are signed in an individual capacity or as a partner in one or more firms. In effect, a CA who is a partner across multiple firms will still be permitted to sign only 60 tax audits in a single financial year. ICAI has further clarified that partners will not be allowed to pool, transfer, or utilize the unexhausted quota of other partners. The objective is to curb a long-standing practice in certain large firms where audit capacity was artificially increased by using the names of several partners, including so-called namesake partners, while the bulk of work was handled by a few individuals. A senior tax practitioner said the latest clarification closes a significant loophole in the system and ensures that accountability for tax audits rested with the professional actually signing and executing the assignment. CA Karim Lakhani said the step was aimed at enhancing transparency, accountability and a more equitable distribution of work among professionals. He added that it was also likely to open up opportunities for junior chartered accountants and younger partners. Monitoring, he said, is expected to become more robust through the UDIN system, which records details whenever a CA signs an audit report, allowing the institute to track audit volumes member-wise with greater accuracy. CA Samir Chaudhary termed the changes a progressive move towards improving audit quality, increasing transparency and ensuring fair opportunities within the profession. ICAI has also clarified that revised tax audit reports as well as audits under presumptive taxation will not be included in the 60-audit threshold.
