CA Final Grace Marks Policy & Negative Marking Explained for May 2026 Attempt

If you're preparing for CA Final May 2026, understanding how ICAI evaluated the January 2026 attempt can directly impact your strategy. Many students rely on past trends like grace marks or lenient checking, but recent developments suggest a shift.

ICAI did not award subject-specific grace marks in the challenging January 2026 CA Final exams, a shift from past practice. However, student-specific grace marks were still provided to aid students close to passing. 

A new negative marking policy was observed exclusively in the FR paper for format deviations. Future preparation should not rely on grace marks but focus on self-effort.

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ICAI Grace Marks Policy: Understanding the Basics

ICAI provides grace marks under two distinct categories:

1. Subject-Specific Grace Marks

• Awarded when a paper is unusually difficult

• Given to all students who appeared for that subject

• Independent of individual performance

2. Student-Specific Grace Marks

• Given to individual students

• Applicable when a few marks can help clear a paper or group

• Depends on the student’s overall performance.

January 2026 CA Final Exams: No Subject-Specific Grace Marks

Despite the high difficulty and presence of ambiguous questions, the January 2026 exam saw no subject-specific grace marks awarded. Analysis of numerous certified copies, including that of All India Rank Six, consistently showed no discrepancy between the calculated marks (MCQ + Descriptive) and the final awarded marks. 

• This pattern was consistent even in tough subjects like:

• IBS

• IDT

• AFM

This suggests that ICAI may have discontinued the practice of awarding subject-specific grace.

Past Trend: Grace Marks Were Previously Awarded

While the January 2026 exam did not feature subject-specific grace, prior exams did award grace marks. For instance, in the May 2021 exam, a total of 13 grace marks were awarded in one case across various papers, illustrating a historical trend of ICAI providing bonus marks in specific situations.

Student-Specific CA Final Grace Marks in January 2026

Although subject-specific grace was not awarded in the January 2026 exam, ICAI did provide student-specific grace marks. This was offered under two specific conditions:

1. Up to 5 Marks Grace:

• Conditions: The student must hold an exemption in at least one subject, and the awarding of up to 5 grace marks would lead to the clearance of a paper and the entire group.

• Example: A student with 35 marks in IBS, having exemptions in IDT (54 marks) and DT (65 marks), received 5 grace marks. This brought their IBS score to 40, enabling them to clear the second group.

2. Up to 1 Mark Grace:

• Conditions: Even without an existing exemption, if one mark is sufficient to clear a paper and the group.

• Example: A student initially scoring 39 marks (23 Descriptive + 16 MCQ) in IBS was awarded 1 grace mark, bringing their total to 40 and thereby clearing the second group.

Negative Marking Introduced in January 2026

A major and unexpected development was the introduction of negative marking.

Where Was it Applied?

• Only in Financial Reporting (FR)

• Specifically in Question 1, Step 7

What Happened?

• 0.5 marks deducted

• Reason: Not following Ind AS balance sheet format exactly

This was:

• Verified across multiple certified copies

• Observed consistently across students

Past Evaluation Pattern: No Negative Marking Earlier

Earlier attempts showed a very different approach:

• Students received near-full marks even with:

• Short forms like PPE, NCI

• Slight format deviations

Example:

• 15.5/16 marks awarded despite non-strict format

Therefore, January 2026 introduced a new level of strictness in presentation.

CA Final May 2026 Preparation: New Approach

Given the recent changes, future exam preparation should not rely on grace marks. Instead:

• Target clear 40+ scores in each subject

• Practice strict format adherence (especially in FR)

• Focus on accuracy over approximation

• Revise presentation standards using ICAI model answers