ICAI Issues Exposure Draft on Tax Audit Guidance Note 2026

The Institute of Chartered Accountants of India (ICAI) has issued an Exposure Draft of the Guidance Note on Tax Audit under Section 44AB of the Income-tax Act, 1961 for Assessment Year 2026–27. The draft has been released by the Direct Taxes Committee of ICAI for stakeholder comments. 

The Exposure Draft includes several important updates in the existing guidance note. Key changes include the inclusion of Virtual Digital Assets (VDAs) and Carbon Credits under gross receipts in business, clarification on items not forming part of gross receipts, guidance on revision of tax audit conducted by another member, and updates relating to UDIN and branch audit counting.

The draft also incorporates references to the Digital Personal Data Protection Act, 2023, TAQRB observations on common errors and deficiencies in tax audit reports, and revised formats for management representation letters. ICAI has invited comments on the draft, with the last date for submission of comments stated as 25 July 2026. CA Sansaar