TAR Late Fee Changes FY 2025-26 — Summary

Significant TAR Late Fee Changes from FY 2025-26 — Quick Summary

TAR Late Fee Changes FY 2025-26

From FY 2025-26, the late fee framework for filing the Tax Audit Report (TAR) is shifting from turnover-based penalties to fixed charges based on delay duration. The change aims to improve clarity and make compliance costs more predictable.

What’s Changing?

Current system (FY 2024-25):

  • Late fee equals 0.5% of turnover
  • Maximum penalty capped at ₹1.5 lakh

New system (FY 2025-26):

  • Delay up to 30 days → Fixed ₹75,000
  • Delay beyond 30 days → Fixed ₹1,50,000

This replaces percentage-based penalties with clear slabs, making consequences easier to understand.

Important Deadlines

  • 30 September 2026 → Audit completion & TAR filing deadline
  • 31 October 2026 → Income Tax Return filing deadline

Even a short delay after the audit deadline triggers the fixed penalty.

Why It Matters

  • Predictable compliance cost
  • Strong incentive to file on time
  • No dependency on turnover size
Bottom Line: From FY 2025-26 onward, TAR delays attract fixed and significant penalties. Planning audits early is the best way to avoid unnecessary costs.