The Central Board of Direct Taxes (CBDT), through notification no. 27/2024 dated 05.03.2024, has made several amendments to Form 3CD, which will be effective from the Assessment Year (AY) 2024-25. The changes pertain to various clauses within the form, aimed at incorporating new provisions and refining existing ones.
Below are the clauses in which changes are made:
- Clause 8a (Whether company has opted for the special tax regime with lower tax rates)
- Clause 12 (Reporting of profits assessable under presumptive tax schemes credited to P&L)
- Clause 18 (Depreciation admissible)
- Clause 19 (Amount admissible as deduction under Sections 35, 35D, etc.)
- Clause 21(a) [Amounts debited to P&L covered by Explanation 3 to section 37(1)]
- Clause 26 (Amounts covered Section 43B)
- Clause 32 (Brought forward loss or depreciation)
Below are the detailed amendments:
Clause 8a (Whether company has opted for the special tax regime with lower tax rates)
Earlier clause 8a requires the tax auditor to state “Whether the assessee has opted for taxation under section 115BA/115BAA/115BAB/115BAC/115BAD”.
The Finance Act 2023 introduced an alternative tax scheme for manufacturing co-operative societies u/s 115BAE. Clause 8a adds the reference to Section 115BAE.
Clause 12 (Reporting of profits assessable under presumptive tax schemes credited to P&L)
Prior to the amendment, clause 12 read as follows “Whether the profit and loss account includes any profits and gains assessable on a presumptive basis, if yes, indicate the amount and the relevant sections (44AD, 44AE, 44AF, 44B, 44BB, 44BBA, 44BBB, Chapter XII-G, First Schedule or any other relevant section)”.
Now reference to section 44ADA has been specifically added.
Clause 18 (Depreciation admissible)
Prior to the amendment, clause 18(ca) read as under –
“Adjustment made to the written down value under Section 115BAC/115BAD (for the assessment year 2021-22 only).”
The above subclause is replaced by below –
(i) under the proviso to sub-section (3) of Section 115BAA (for assessment year 2020-21 only);
(ii) under the first proviso to sub-section (3) of section 115BAC or the proviso to sub-section (3) of 115BAD (for assessment year 2021-22 only);
(iii) under the second proviso to sub-section (3) of section 115BAC (for assessment year 2024-25 only).”;
For the AY 2020-21, domestic companies opting for section 115BAA were required to adjust the opening WDV in terms of provisions of section 115BAA. Such adjustment was to be done for AY 2020-21 only.
For the AY 2021-22, individuals/HUF opting for section 115BAC were required to adjust the opening WDV in terms of provisions of section 115BAC, such adjustment was to be done for AY 2021-22 only.
For the AY 2024-25, individuals/HUF/AOP/BOI etc opting for section 115BAC(1A) were required to adjust the opening WDV in terms of provisions of the section.
Clause 19 (Amount admissible as deduction under Sections 35, 35D, etc.)
Pre amended clause 19 requires disclosure of amount admissible u/s various sections including section 35AD,35D.
Now, below 2 additional entries has been inserted in clause 19 namely –
- Section 35ABA
- Any other relevant section
Section 35ABA is in relation to tax treatment for capital expenditure incurred to acquire the right to use spectrum for telecommunication services.
Any other relevant section – As per the guidance note issued by ICAI, the deduction is to be claimed as provided under any other relevant section not covered in clause 19. At present, for AY 2024-25, there is no other relevant section.
Clause 21(a) [Amounts debited to P&L covered by Explanation 3 to section 37(1)]
Clause 21(a) requires furnishing the details of amount debited to the P&L account, being in the nature of capital, personal, advertisement expenditure etc.
Changes made in clause is highlighted in bold and italic below –
(i) Capital Expenditure
(ii) Personal Expenditure
(iii) Advertisement expenditure in any souvenir, brochure, tract, pamphlet or the like published by a political party
(iv) Expenditure incurred at clubs being entrance fees and subscriptions
(v) Expenditure incurred at clubs being cost for club services and facilities used.
(vi) Expenditure for any purpose which is an offence or is prohibited by law or expenditure by way of penalty or fine for violation of any law (enacted in India or outside India)
(vi) Expenditure by way of penalty or fine for violation of any law for the time being in force
(viivia) Expenditure by way of any other penalty or fine not covered above
(vii) Expenditure incurred to compound an offence under any law for the time being in force, in India or outside India
(viii) Expenditure incurred to provide any benefit or perquisite, in whatever form, to a person, whether or not carrying on a business or exercising a profession, and acceptance of such benefit or perquisite by such person is in violation of any law or rule or regulation or guideline, as the case may be, for the time being in force, governing the conduct of such person
(viii) Expenditure incurred for any purpose which is an offence or which is prohibited by law
Clause 26 (Amounts covered Section 43B)
In this clause, after (g), the word (h) of section 43B has been added.
This amendment is consequential to the new clause (h) inserted by Finance Act, 2023, in Section 43B.
Below reporting is required to be done under the amended clause:
Any other amount not allowable under clause (h) of section 43B of the Income-tax Act,1961.
Points to be noted –
43B(h) is applicable only in respect of the sum payable to a Micro and small enterprise. It is not applicable for Medium enterprise.
Clause 32 (Brought forward loss or depreciation)
In clause 32, in sub-clause (a),–
(I) in the table, in column (5), for the figures and letters “115BAD”, the figures and letters “115BAD/115BAE” shall be substituted;
(II) in the table, in column (6), for the figures and letters, “115BAD^”, the figures and letters “115BAD/115BAE^” shall be substituted;
(III) below the table, for the words and figures “To be filled in for assessment year 2021-22 only.”, the words and figures “To be filled in only for assessment year 2021-22 and 2024- 25, as applicable.”, shall be substituted;
These amendments to Form 3CD ensure compliance with the latest legislative changes and provide clarity on the specific requirements for tax audits. Tax professionals and auditors should familiarize themselves with these updates to accurately complete the form for AY 2024-25.
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