CAs as Sole Experts in Tax Audit crucial to maintain credibility of Financial Statements: ICAI President

The President of ICAI, CA. Charanjot Singh Nanda, after being elected as a president of ICAI shared his message to encourage the young professional to do better.

President Message

Dear Professional Colleagues,

As the couplet so beautifully reminds us “Guru Gobind dou khade, kake laagu paye, Balihaari guru aapne, Gobind diyo bataye”. This Institute is my guru, my guiding light, my alma mater and I feel deeply blessed to be entrusted with its leadership. I humbly assume the baton of leadership as the 73rd President of this esteemed Institute, embracing the profound honour and responsibility it entails. In this journey, I place my faith in the Almighty, seeking strength and guidance to elevate our profession to new pinnacles of success.

With profound gratitude, I extend my heartfelt appreciation to my mentors, principal, family, colleagues, and members of ICAI, including council members, each a guiding force who has supported and inspired me, shaping my journey and strengthening my resolve to serve the profession. I also express my sincere admiration for the outgoing President, CA. Ranjeet Kumar Agarwal, whose wisdom, foresightedness, and dedication have significantly contributed to the growth and progress of the Institute. I hold the esteemed Past Presidents and Council Members in the highest regard, honoring their invaluable contributions since the inception of ICAI on 1st July 1949. Their commitment, relentless dedication, and visionary leadership have been the driving force behind the Institute’s remarkable growth, shaping it into the world’s largest accounting body. This extraordinary achievement stands as a testament to their resilience, foresight, and steadfast devotion to the profession and has been the very foundation of ICAI’s unparalleled stature on the global stage.

The Institute of Chartered Accountants of India (ICAI) stands today not merely as an educator but as a pillar of the nation’s financial framework. Our role extends far beyond academia-ICAI is a dynamic force shaping India’s economic and financial landscape. As a partner in nationbuilding, we have aligned our efforts with the government’s¸ vision for Viksit Bharat, working collaboratively to implement changes in laws and offering insightful recommendations to strengthen the nation’s financial architecture.

It is heartening to note the consideration of ICAI’s suggestions in the Finance Bill, 2025, and in the Income-tax Bill, 2025.

ICAI Suggestions Considered in the Union Budget 2025-26

The Institute of Chartered Accountants of India (ICAI) applauds the government of India for delivering a progressive and reform-oriented Union Budget 2025. This budget marks a substantial step towards simplifying tax rules, decreasing litigation, and making compliance easier for taxpayers, in line with the ICAI’s long-standing recommendations for an efficient and effective tax structure. I’m delighted to inform you that many of the ICAI proposals have been included in the budget recommendations.

Amongst the ICAI’s suggestions that have been considered in the Finance Bill, 2025, are tax exemption on withdrawals from National Savings Scheme (NSS) accounts to mitigate taxpayer hardship, revision of section 115UA(2) so that longterm capital gains referred in section 112A is taxed at the rate specified therein and not at MMR, and the introduction of a simplified regime to ease compliance for small charitable trusts and institutions.

Furthermore, the ICAI has successfully lobbied for an increase in the TDS level under section 194J, the elimination of TCS under section 206C(1H), and the review of the outdated Rs. 50,000 salary thresholds for “specified employee” taxation of perquisites. As a key step towards tax structure rationalisation, the ICAI has proposed introducing a 25% tax slab under the default tax system in section 115BAC(1A), as well as making required adjustments to tax slabs and rates. These measures also correspond with the ICAI’s overarching goal of building a progressive and efficient tax ecosystem.

ICAI’s Suggestions Considered in the Income Tax Bill 2025

ICAI continues to play a pivotal role in shaping a more efficient and streamlined tax framework. ICAI had, in its suggestions for a comprehensive review of the Income-tax Act, 1961, identified 13 chapters containing about 130 sections, in addition to another 134 sections and 9 schedules for elimination.

Further, to enhance ease of compliance, ICAI suggested rationalization of the Charitable Trust Registration and Taxation regime as well as the introduction of a simplified scheme for smaller charitable trusts and institutions. The ICAI’s call to reduce the use of complex provisos has also been acknowledged. Furthermore, essential tax deduction criteria have been rationalised, including an increase in the TDS threshold for professional services, technical services, and royalty payments, as well as the creation of an independent TDS threshold for directors’ remuneration.

Other notable recommendations considered in the Bill include the removal of TCS on the sale of goods, the expansion of the definition of “relative” to include maternal lineal ascendants and descendants, and defining “property” to include virtual digital assets as a separate item in the list of capital assets given thereunder. Furthermore, “advance ruling” is being redefined by replacing “Authority” with the “Board for Advance Rulings.” The outdated salary threshold of 50,000 for “specified employee” —set over two decades ago—is also being revised to better reflect presentday realities.

While these reforms are a positive step, the ICAI remains dedicated to working with policymakers to ensure their effective implementation. ICAI has formed seven expert groups across India to thoroughly review the new Income-tax Bill 2025 and will soon submit its recommendations so that the objectives of simplifying the language of the law, as well as mitigating litigation and reducing compliance burden, are met while enacting the new law.

While discussing the Income-tax Bill 2025, it may be noted that Chartered Accountants, with their specialized qualification covering in-depth auditing framework and taxation laws, rigorous training, and deep expertise, are uniquely suited to conduct tax audits with the highest standards of quality and integrity.

The mandate of tax audit under Section 44AB of the Income-tax Act underscores the necessity of engaging professionals who are extensively trained, regulated, and governed by a statutory body solely dedicated to ensuring financial discipline and compliance. ICAI ensures that its members adhere to the highest levels of professional competence and ethical standards, thereby strengthening the tax ecosystem and promoting transparency in financial reporting.

The recognition of Chartered Accountants as the sole experts in tax audit is crucial to maintaining the credibility of financial statements and reinforcing the trust of stakeholders in the taxation system.

I am certain that Chartered Accountants are the best and only experts qualified to carry on this onerous responsibility, and lawmakers have occasionally placed their trust in the profession to conduct tax audits since its inception. The ICAI will continue to work with the authorities to ensure that the integrity of tax audits is maintained in the best interests of the profession and the economy as a whole.