Form No. 27 is a mandatory reporting form under Rule 50 of the Income-tax Rules, 2026 for specified entities undergoing dissolution or reconstitution, where income is taxable under section 67(10) of the Income-tax Act, 2025. It requires attribution of taxable income to capital assets that remain with the entity after such events. The form must be filed electronically along with the return of income for the relevant tax year and is based on valuation carried out by a registered valuer. It captures detailed asset-wise information including book value, revalued value, classification, and attribution of gains. The form ensures proper implementation of valuation-based taxation rules and prevents disputes in capital gains computation. Non-filing or incorrect filing may lead to denial of deductions, disputes, and legal proceedings. Overall, Form 27 enhances transparency, ensures accurate attribution of income, and supports consistent tax treatment in cases of restructuring or dissolution.
Income Tax Department
Ministry of Finance, Government of India
FAQs on Income Tax Form 27 – Details of amount attributed to capital asset remaining with the specified entity under Income Tax Act, 2025
Form No. 27 – Frequently Asked Questions (FAQs)
Details of Amount Attributed to Capital Asset Remaining with the Specified Entity (See Rule 50 of the Income-tax Rules)
Q1. What is Form No. 27?
Ans Form No. 27 is a form prescribed under Rule 50 of the Income-tax Rules to be furnished by a specified entity for reporting the amount attributed to capital assets remaining with the specified entity, in cases where income is taxable under section 67(10) of the Income-tax Act, 2025 (corresponding to section 45(4) of the Income-tax Act, 1961).
Q2. What is the objective of Form No. 27?
Ans The objective of Form No. 27 is to operationalise the method prescribed under Rule 50 for attribution of income taxable under section 67(10) to the capital assets that continue to remain with the specified entity after dissolution or reconstitution.
Q3. Who is required to file Form No. 27?
Ans Form No. 27 is required to be filed by every specified entity from which a specified person receives, during the tax year, any capital asset or stock-in-trade or both, in connection with the dissolution or reconstitution of such specified entity.
Q4. Is Form No. 27 mandatory?
Ans Yes. Furnishing Form No. 27 is mandatory where income becomes taxable under section 67(10) and attribution of such income to capital assets remaining with the specified entity is required under Rule 50.
Q5. When should Form No. 27 be filed?
Ans Form No. 27 must be furnished along with the return of income of the specified entity for the tax year in which the specified person receives the capital asset or stock-in-trade or both upon dissolution or reconstitution.
Q6. How many times is Form No. 27 required to be filed?
Ans Form No. 27 is event-specific and is required to be filed for each tax year in which a dissolution or reconstitution event occurs giving rise to taxation under section 67(10).
Q7. What information is required to be furnished in Form No. 27?
Ans The form requires details of the specified entity, tax year, amount taxable under section 67(10), asset-wise attribution of such amount, book value and revalued value of assets, classification of assets as short-term or long-term, details of the registered valuer, and upload of valuation report.
Q8. Is valuation of capital assets mandatory?
Ans Yes. Attribution under Rule 50 must be based on a valuation report issued by a registered valuer, and a copy of such report is required to be uploaded.
Q9. Who is required to verify and sign Form No. 27?
Ans Form No. 27 must be verified and signed by the authorised person or principal officer of the specified entity.
Q10. Can Form No. 27 report more than one capital asset?
Ans Yes. The form allows reporting of multiple capital assets with asset-wise attribution and reporting of the aggregate total.
Q11. Can Form No. 27 be filed offline?
Ans No. Form No. 27 is required to be furnished electronically.
Q12. Is revision of Form No. 27 permitted?
Ans Revision may not be permitted unless specifically enabled by the electronic filing system. Care should therefore be taken to ensure correctness before filing.
Q13. What are the consequences of non-filing or incorrect filing of Form No. 27?
Ans Non-filing or incorrect filing may lead to disputes in computation of capital gains, denial of deductions under section 72(5), and initiation of proceedings under the Income-tax Act.
Q14. Why is Form No. 27 important?
Ans Form No. 27 ensures correct implementation of Rule 50, provides transparency in valuation-based attribution, and reduces litigation in cases of dissolution and reconstitution.
Guidance Note Income Tax Form 27 – Details of amount attributed to capital asset remaining with the specified entity under Income Tax Act, 2025
Purpose:
Form 27 is prescribed under Rule 50 of the Income Tax Rules, 2026 and is required to be filed by the specified entity to furnish details of amount attributed to the capital asset remaining with the specified entity under section 48 (iii) of the Income Tax Act (Section 72(5) of ITA 2025).
Rule 50 provides for the attribution of income taxable under sub-section (4) of section 45 of ITA 1961 (Section 67(10) 0f ITA 2025) to the capital assets remaining with the specified entity, under section 48(iii) of ITA 1961 (Section 72(5) of ITA 2025).
This form serves as the basis for computation of amount attributed to the capital asset remaining with the specified entity under section 48 of the Income Tax Act, as per the method prescribed under Rule 50 of the Income-Tax Rules 2026.
The form must be certified by the principal officer/Authorized person of the specified entity on the basis of the valuation report of a registered valuer making valuation/revaluation of the capital assets.
Who Should File:
Every specified entity from whom a specified person receives during the tax year any capital asset or stock-in-trade or both in connection with the dissolution or reconstitution of such specified entity, in terms of section 9B of the Income Tax Act 1961 (Section 8 of ITA 2025).
When and How to File:
1. The form shall be furnished to the Assessing Officer along with the return of income for:
- the tax year during which any specified person receives any capital asset or stock-in-trade or both in connection with the dissolution or reconstitution of a specified entity
2. Filing is required by every specified entity.
3. The form shall be furnished electronically either under digital signature or through electronic verification code verified by the person who is authorized to verify the return of income of the specified entity.
Filing Count:
The number of Forms 5C filed over the past five years is 170.
Structure of the revised Form 27:
The revised Form 27 comprises the following details:
1. Name
2. Permanent Account Number (PAN)
3. Assessment Year
4. Amount taxable under sub-section (4) of Section 45 (Section 67(10) 0f ITA 2025)
5. Attribution of amount taxable under sub-section (4) of Section 45 (Section 67(10) 0f ITA 2025) to capital assets remaining.
6. Name and Registration number of the valuer based on whose valuation report attribution of amount taxable under sub-section (4) of Section 45 (Section 67(10) 0f ITA 2025) to capital assets remaining has been computed.
Verification Section:
The authorized person of the specified entity verifies and certifies correctness and completeness of the information provided under Form 27 and also mentions his PAN.
Legal Framework (Rule 50 Overview):
- Rule 50 provides for the attribution of income taxable under sub-section (4) of section 45 (Section 67(10) 0f ITA 2025) to the capital assets remaining with the specified entity, under section 48 (iii) of ITA 1961 (Section 72(5) of ITA 2025).
- Specified Person (SP) and Specified Entity (SE) have been defined in section 9B of ITA 1961 (Section 8 of ITA 2025)
- As per section 9B of the IT Act 1961 (Section 8 of ITA 2025), receipt of capital asset (CA) by SP from SE on dissolution or reconstitution of SE is deemed as transfer of Capital Asset (CA) by the SE
- Any profits/gains arising from such deemed transfer of CA by the SE shall be taxable as Capital Gains
- Free market Value of the CA transferred shall be deemed as full value of consideration (FMV) for the deemed transfer
- Section 45(4) of ITA 1961 (Section 67(10) 0f ITA 2025) provides for the method of determination of gains from such deemed transfer:
- Section 48(iii) of ITA 1961 (Section 72(5) of ITA 2025) provides that the manner of computation of quantum of deduction in respect of the deemed transfer of CA by the SE will be as prescribed.
- Rule 50 lays down the manner of attribution of income taxable u/s 45(4) (Section 72(5) of ITA 2025) remaining with the SE
- Authorized officer of the specified entity is required to file Form 27 providing details of the amount attributed to capital asset remaining with the specified entity
Practical Guidance:
1. Maintain documentary proof of the capital assets or stock-in trade transferred to the specified persons by the specified entity, pursuant to its dissolution or reconstitution in terms of section 9B of the Income-Tax Act 1961.
2. Get the assets/stock-in-trade valued/revalued by a Registered valuer and obtain a valuation report.
3. File the Form electronically within the statutory timeline.
Rule Reference: Rule 50 of the Income Tax Rules, 2026.
Form Reference: Form 27 – Details of amount attributed to capital asset remaining with the specified entity
