Statutory Audit Applicability in India – Turnover Limits, Penalties & Due Dates (FY 2025–26)

Statutory audit applicability in India is one of the most misunderstood compliance areas among businesses, startups, and professionals. Many taxpayers assume that audit becomes mandatory only after crossing a certain turnover, while ignoring entity-specific rules, cash transaction limits, and company law requirements.

According to assessment trend data, more than 60% audit defaults arise due to incorrect understanding of audit applicability, not intentional non-compliance. This makes it critical to clearly understand who is required to get statutory audit in India, along with applicable limits, penalties, and due dates for FY 2025–26.

This guide is designed to give decision-ready clarity, not generic explanations.

Statutory Audit Applicability in India: Who Is Required to Get Statutory Audit?

Statutory audit applicability in India depends on three decisive factors:

1. Nature of entity

2. Turnover or gross receipts

3. Cash transaction percentage

Different rules apply to businesses, professionals, LLPs, and companies, which is where most confusion begins.

Statutory Audit Turnover Limit for Business in India

A proprietorship or partnership firm is required to get statutory audit if:

• Total turnover exceeds ₹1,00,00,000, OR

• Turnover exceeds ₹10,00,00,000 and

  • Cash receipts ≤ 5%

  • Cash payments ≤ 5%

If either cash receipts or cash payments exceed 5%, the enhanced ₹10 crore limit does not apply, and audit becomes mandatory once turnover crosses ₹1 crore.

This single condition accounts for nearly 45% audit-related penalties imposed on MSMEs.

Statutory Audit for LLP in India - Applicability Explained

An LLP is required to undergo statutory audit if either of the following conditions is met:

• Annual turnover exceeds ₹40,00,000, OR

• Capital contribution exceeds ₹25,00,000

Many LLPs incorrectly assume that LLP audit rules follow proprietorship limits, which is legally incorrect and risky.

Statutory Audit for Private Limited Company in India (Mandatory in All Cases)

Statutory audit is mandatory for every private limited company in India, irrespective of:

• Turnover

• Profit or loss

• Business activity

• Dormant or inactive status

Even a company with zero turnover must:

• Appoint an auditor

• Conduct statutory audit

• File audited financial statements

This makes professional auditing services in India essential, not optional, for companies.

Statutory Audit Due Date for Companies and Businesses (FY 2025–26)

Late audits significantly increase the probability of faceless assessment scrutiny and reconciliation queries.

Statutory Audit Penalty in India for Non-Compliance

Under Section 271B of the Income-tax Act:

• Penalty = 0.5% of turnover

• Maximum penalty = ₹1,50,000

Penalty exposure increases further when:

• GST turnover mismatches books

• Cash transactions are high

• Audit reports are filed late

In practice, audit penalties often exceed the cost of professional audit services.

Common Mistakes That Trigger Statutory Audit Defaults

1. Assuming GST filing replaces statutory audit

2. Ignoring cash transaction percentages

3. Delaying auditor appointment

4. Poor bookkeeping and reconciliations

5. Misinterpreting LLP and company audit rules

These errors are procedural, but their consequences are financial and legal.

Why Businesses Prefer Professional Auditing Services in India

Modern statutory audits are no longer limited to compliance reporting. Businesses now expect:

• Accurate applicability analysis

• Clean books and reconciliations

• Risk identification before filing

• Smooth handling during assessments

This is why businesses increasingly rely on professional auditing services in India rather than treating audit as a year-end formality.

How Shunyatax Global Helps with Statutory Audit Compliance

Shunyatax Global approaches statutory audit as a risk-management exercise, not a checklist task.

Our focus includes:

• Audit applicability review before deadlines

• Alignment of books, GST, and tax data

• Structured statutory audit execution

• Confidential and compliant handling

This reduces post-audit exposure and long-term compliance risk.

FAQ: Statutory Audit Applicability in India (FY 2025–26)

Q1. Who needs statutory audit in India?
Answer: Every company (Private Limited / Public / OPC) needs a statutory audit under the Companies Act, regardless of turnover. For businesses and professionals, audit applicability depends on turnover/gross receipts and specific conditions under the Income-tax Act.

Q2. What is the statutory audit turnover limit for business?
Answer: Businesses generally require audit when turnover exceeds ₹1,00,00,000. In certain cases, where cash receipts and cash payments are within prescribed limits, the threshold may extend up to ₹10,00,00,000.

Q3. Is statutory audit mandatory for a Private Limited Company even with zero turnover?
Answer: Yes. Statutory audit is mandatory for private limited companies even if turnover is ₹0, because the Companies Act requires audited financial statements and compliance filings.

Q4. What are the rules for statutory audit for LLP in India?
Answer: LLP audit is applicable when turnover exceeds ₹40,00,000 or capital contribution exceeds ₹25,00,000, as per LLP compliance requirements.

Q5. What is the statutory audit penalty in India if audit is missed?
Answer: Under Income-tax provisions, penalty can be 0.5% of turnover, capped at ₹1,50,000, subject to applicable conditions and assessment outcomes.

Q6. What is the statutory audit due date for FY 2025–26?
Answer: Due dates vary by compliance type. For tax audit reporting and audit-linked ITR filings, timelines are generally around September–October of the assessment cycle, while company filings (AOC-4/MGT-7) depend on AGM timelines.

Conclusion: Statutory Audit Applicability Is a Trigger, Not a Formality

Statutory audit applicability in India is precise, enforceable, and increasingly data-driven. Businesses that understand audit limits, penalties, and timelines before crossing thresholds remain compliant and protected.

Ignoring applicability often results in penalties that are avoidable with timely professional guidance.