Penalty for not getting accounts audited

If tax audit is required and not done, the 1961 Act allows a penalty of 0.5% of turnover, up to ₹1,50,000, under Sec 271B, unless reasonable cause is shown. For tax year 2026-27 onwards, a fixed late fee for a late audit report has been introduced under the 2025 Act.

On ₹1.5 crore turnover, 0.5% is ₹75,000, within the ₹1,50,000 cap. Get the audit done and file the report even if late, then file the return. If you have a genuine reason, such as illness or the auditor's resignation, document it for the reasonable cause defence. If cash receipts and payments were each within 5%, the audit limit is ₹10 crore and you may not need audit at all, so check first.