Surat CA Body Request ICAI to Double Guidance Note Applicability Limit on NCEs & LLPs to ₹10 Crore

The Chartered Accountants Association Surat ( CAAS ) has made representation to the Institute of Chartered Accountants of India ( ICAI ) to increase the mandatory applicability threshold for the Guidance Note on Financial Statements of NCEs and LLPs from ₹5 crore turnover to ₹10 crore.

In the representation dated June 9, 2026, the association stated that the current threshold could impose a disproportionate compliance burden on small and medium businesses, particularly those operating in tier-2 and tier-3 cities.

It said that “based on representations received from our members and considering the practical realities faced by small and medium non-corporate entities, particularly in tier-2 and tier-3 cities, we humbly request ICAI to reconsider the present threshold of Rs.5 crore and enhance the threshold for mandatory applicability to Rs.10 crore turnover, on a permanent basis or at least as a long-term calibrated threshold.”

The ICAI has made the guidance notes mandatorily applicable in phases, beginning with entities having turnover exceeding ₹5 crore for accounting periods commencing on or after April 1, 2025.

According to CAAS, the threshold should be aligned with the Income-tax Act’s enhanced tax audit limit of ₹10 crore available to businesses meeting prescribed digital transaction conditions.

The submissions by the CA body:

1. As income tax act recognises Rs. 10cr threshold, the body is expecting ICAI to align with the same and increase the threshold.
2. Increased compliance burden on MSMEs and small professional clients as there were additional requirements of data.
3. Practical difficulties in implementation at ground level as the small firms lack basic accounting system / knowledge which ultimately increases the burden of the chartered accountants.
4. Putting higher threshold enhances the motive of the government’s Ease of doing business and reduction of compliance cost
5. Calibrated and permanent threshold- based approach would be more effective than extending mandatory applicability to all entities within a short period.

As per the body, the framework shall be mandatory to the companies having Rs. 10 crore threshold and Recommendatory or voluntary for entities having turnover up to Rs.10 crore, at least until adequate implementation experience, software readiness, training and stakeholder awareness are achieved.

The body suggested few reliefs including to issue suitable clarification, FAQs and implementation guidance for practical application by small and medium practitioners; and Provide adequate transition time, especially for MSME clients and practising members in smaller cities.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates