Professional Scope of CA, CMA & CS: Debate Over CMA, CS Exclusion in New Income Tax Bill 2025

A major talking point of the Income Tax Bill, 2025, has been the definition of an "Accountant" under Section 2(1) and Section 515(3)(b). The bill exclusively recognizes Chartered Accountants (CAs) with a valid Certificate of Practice ( COP ) under the Chartered Accountants Act, 1949, as “Accountants” for tax audit and compliance purposes.

This decision has led to some strong reactions from CMAs and CSs, who argue that they are equally competent to handle tax audits and financial compliance. On the other hand, CAs support exclusivity, stating that tax audits require specialized financial expertise that only they possess. In this article, we’ll discuss more deeply about the professional scope of CA, CMA & CS, and the debate.

Professional Scope: CA, CMA & CS in India

1. Chartered Accountants (CAs)

Regulated by: The Institute of Chartered Accountants of India (ICAI) under the Chartered Accountants Act, 1949.

Key Responsibilities:

• Statutory & Internal Audits – Conducting financial audits for companies, banks, and businesses.
• Taxation & Compliance – Handling income tax, GST, and corporate tax filings.
• Financial Reporting & Assurance – Ensuring accuracy in financial statements.
• Representation before Tax Authorities – Assisting clients in tax disputes and litigation.

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2. Cost and Management Accountants (CMAs)

Regulated by: The Institute of Cost Accountants of India (ICAI-CMA) under the Cost and Works Accountants Act, 1959.

Key Responsibilities:

• Cost Audits & Analysis – Ensuring cost efficiency and financial control.
• Strategic Financial Planning – Helping businesses with pricing, budgeting, and performance evaluation.
• Indirect Taxation & GST Compliance – Advising on cost-related tax strategies.
• Decision-Making Support – Providing profitability insights for business growth.

3. Company Secretaries (CSs)

Regulated by: The Institute of Company Secretaries of India (ICSI) under the Company Secretaries Act, 1980.

Key Responsibilities:

• Corporate Law & Governance – Ensuring compliance with legal frameworks.
• Secretarial Audits – Verifying corporate governance and regulatory compliance.
• Legal Advisory & Mergers – Handling corporate restructuring and business laws.
• Board Compliance & Stakeholder Relations – Acting as a link between company management and regulators.

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What the Bill Says About Tax Audits

“accountant” means a chartered accountant as defined in section 2(1)(b) of the Chartered Accountants Act, 1949, who holds a valid certificate of practice under section 6(1) of that Act.

• Section 515(3)(b) of the bill states that an "Accountant" must be a Chartered Accountant with a valid Certificate of Practice (COP).
• CMAs and CSs are not included in this definition.
• No provision allows them to conduct tax audits or certify financial statements.

This has led to strong reactions from CMAs and CSs, who expected broader recognition in tax-related roles.

Arguments For Expanding Tax Audit Powers

The decision to exclude Cost and Management Accountants (CMAs) and Company Secretaries (CSs) from tax audits has created a huge debate. Many believe that CMAs and CSs have enough expertise in taxation, financial compliance, and corporate laws to handle tax audits just like Chartered Accountants (CAs).

If you look at other countries, tax audits are not controlled by just one profession. Instead, they allow multiple financial experts like cost accountants, tax consultants, and legal auditors to perform tax audits. If India wants to keep up with global standards, we should open tax audits to more professionals instead of keeping them in the hands of only CAs.

Some also argue that CAs already have a lot on their plate. They handle statutory audits, tax filings, financial consulting, and so much more. Allowing CMAs and CSs to conduct tax audits would reduce their workload and ensure businesses get the best expert for their needs.

Arguments Against Expanding Tax Audit Powers

On the other side of the argument, many believe that tax audits should remain exclusive to Chartered Accountants (CAs) because tax audits require specialized knowledge in financial reporting, forensic accounting, and statutory audits—something that only CAs are trained for.

Tax audits are not just about filling numbers in a report in fact they involve verifying financial records, catching tax fraud, and ensuring businesses follow tax laws correctly. What happens if something goes wrong? A single mistake in a tax audit can lead to heavy penalties, legal trouble, or even fraud cases. CAs are trained to detect and prevent these risks, while CMAs and CSs are not trained at the same level in forensic accounting and fraud detection.

Some also argue—if CMAs and CSs really want to conduct tax audits, why not just do a CA qualification? Instead of changing the rules, they could take additional training in financial audits and meet the same standards as CAs.

What’s Next? Possible Outcomes

Both The Institute of Company Secretaries of India (ICSI) and The Institute of Cost Accountants of India (ICMAI) have formally requested the government to revise the definition of "Accountant" under Section 515(3)(b) of the Income Tax Bill 2025. They argue that excluding CSs and CMAs from tax audits limits professional diversity creates an unfair monopoly for CAs, and restricts businesses from accessing a broader pool of qualified experts.

Both institutes have assured their members that they are actively engaging with policymakers to push for a more inclusive tax audit framework, ensuring that CMAs and CSs receive due recognition in India’s taxation ecosystem.

Conclusion

The Income Tax Bill, 2025, has strengthened the role of Chartered Accountants in tax audits, while excluding CMAs and CSs has sparked controversy. While CAs argue that audit expertise must remain exclusive to them, CMAs and CSs believe their skills deserve equal recognition.

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The coming months will determine whether this exclusion remains or gets revised. Will the government reconsider its stance, or will CAs continue to dominate tax audits in India?

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