ICAI notifies rules to limit annual tax audits to 60 per partner

Jul 30, 2025

Synopsis
To discourage audit assignment concentration among senior partners and curb anti-competitive practices, the Institute of Chartered Accountants of India (ICAI) has set new guidelines. Effective April 2026, these guidelines limit each accounting firm partner to a maximum of 60 tax audits annually. The audit of a head office and its branches will be considered a single assignment.

The Institute of Chartered Accountants of India (ICAI) on Tuesday notified guidelines that limit the number of tax audits that an accounting firm partner can take up in a year to 60. The new guidelines will take effect from April 2026.

As per the extant guidelines, while a single chartered accountant operating independently can undertake up to 60 tax audits in a fiscal year, a partnership firm is allowed to conduct audits up to the combined limit of all its partners. This often results in senior partners using the quota of their junior colleagues after exhausting their own individual limit.

ET had reported on June 18 that the ICAI would impose this limit to discourage a concentration of audit assignments with only a few senior partners at accounting firms and to curb anti-competitive conduct.

The 'Chartered Accountants (Limit on Number of Tax Audits) Guidelines, 2025', notified on Tuesday, also state that the audit of the head office and branch offices of an entity would be regarded as a single tax audit assignment.

The audit of one or more branches of the same entity by one chartered accountant in practice will be construed as a single tax audit assignment, it added.

"A chartered accountant being a part-time practicing partner of a firm shall not be taken into account for the purpose of reckoning the tax audit assignments of the firm," the notification said.

[The Economic Times]