In a firm policy shift, the Institute of Chartered Accountants of India (ICAI) has warned of penal action against chartered accountants who violate the newly introduced cap on tax audits. Effective from April 2026, the guidelines limit each partner of an accounting firm to 60 tax audits per fiscal year—a rule now declared “mandatory, not advisory” by ICAI President Charanjot Singh Nanda.
Previously, while the 60-audit cap technically applied per individual, loopholes in partnerships allowed senior partners to exploit the quotas of junior colleagues, creating an unhealthy concentration of assignments and arguably anti-competitive dynamics within the profession. The new enforcement mechanism targets this grey zone, aiming to promote equitable distribution of audit work and improve compliance quality across the board.
“We won’t hesitate to take action,” Nanda said, making it clear that disciplinary measures will be taken against firms and individuals who flout the policy. The rule is seen as a step toward curbing audit monopolisation, particularly by senior figures in large firms, and fostering more inclusive professional opportunities for younger CAs.
Forging New Alliances: ICAI Joins Forces with IVCA and NSE-IFSC
On the same day as the tax audit cap warning, ICAI also unveiled two significant strategic partnerships to support India’s evolving alternative investment and capital market ecosystem.
The first is a five-year MoU with the Indian Venture and Alternate Capital Association (IVCA), under which the two entities will collaborate on:
- Setting up joint expert groups for policy consultation
- Standardising financial reporting frameworks in the alternative investment space
The second is a two-year agreement with NSE-IFSC, the International Financial Services Centre arm of the National Stock Exchange. The partnership focuses on:
- Knowledge-sharing in capital markets
- Joint seminars, workshops, and educational initiatives targeting ICAI members and broader stakeholders
Together, these moves reflect ICAI’s ambition to be not just a regulatory body but also a thought leader in financial market development, particularly as India seeks to become a global hub for venture capital, private equity, and international financial services.
International Dispute Resolution and Global Certification Ambitions
ICAI also took a major leap toward global professional services delivery with the launch of its International Centre for Alternative Dispute Resolution (ADR)—a dedicated platform for handling commercial arbitration, mediation, and conciliation.
Inaugurated by Union Law Minister Arjun Ram Meghwal, the ICAI ADR Centre will provide:
- Process-driven, time-bound dispute resolution
- Services that are professionally managed and globally benchmarked
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Nanda positioned the centre as part of ICAI’s broader internationalisation strategy, which also includes launching certification programmes abroad. The institute has already commenced such a programme in the United States and plans to begin operations in the United Kingdom from August 2025.
This global push is part of a capacity-building mission to align Indian chartered accountants with international standards, open global employment avenues, and strengthen the profession’s stature on the world stage.