Changes made in Form 3CD (Statement of Particulars required to be furnished under section 44AB)

As you may be kindly aware that the due date for filing the tax audit report in Form No 3CA/3CB/3CD is 30th September, 2017 for AY 2017-18. In this regard, we wish to inform the members that CBDT has made the following amendments in Form No. 3CD:

A.    Changes in new clause 31 of Form 3CD

Clause 31 of Form 3CD hasbeen substituted to include within its fold, reporting requirements taking into consideration theamendments effected in section 269SS and 269T, including within its scope payments relating to immovable property transactions.  Further, the scope of reporting in relation to section 269T, relating to repayment of loan or deposit or specified advance, has been increased to also require reporting by the recipient of such loan or deposit or specified advancewhich has been repaid.So far, such reporting was required only by the payer.

The last column of the following table explains the changes in new clause 31.  Further the additions in New Clause 31 in column 2 have been marked in bold italics.

(1)

(2)

(3)

Erstwhile Clause 31

New Clause 31

Changes in New Clause 31

Reporting Requirement

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Reporting Requirement

(a) Particulars of each loan or deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year (a) Particulars of each loan or deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year Sub-clause (a) of new clause 31 requires reporting on whether such loan or deposit is taken by cheque, bank draft or ECS.  Thereafter, if the same is by cheque or bank draft, whether the same was taken or accepted by way of account payee cheque/bank draft has to be reported.  Corresponding sub-clause (a) of erstwhile clause 31 directly required reporting of whether loan or deposit was taken or acceptedotherwise than by account payee cheque or bank draft.
(b) Particulars of each specified sum in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year New reporting requirement:

Consequent to substitution of section 269SS by the Finance Act 2015 including within its scope specified sum receivable in relation to transfer of an immovable property,  sub-clause (b) of new clause 31 requires  reporting of particulars of each specified sum in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year.

(b) Particulars of each repayment of loan or deposit in an amount exceeding the limit specified in section 269T made during the previous year (c) Particulars of each repayment of loan or deposit or specified advance in an amount exceeding the limit specified in section 269T made during the previous year Sub-clause (c) of new clause 31 contains reporting requirement akin to sub-clause (b) of erstwhile clause 31.

Sub-clause (c) of new clause 31 requires reporting on whether repayment is made by cheque, bank draft or ECS.  Thereafter, if the same is by cheque or bank draft, then, whether the same is by way of account payee cheque/account payee bank draft has to be reported.

Corresponding sub-clause (b) of erstwhile clause 31 directly required reporting of whether repayment was made otherwise than by account payee cheque or bank draft.

(c) Whether the taking or accepting loan or deposit or repayment of the same were made by account payee cheque or account payee bank draft  based on the examination of books of account and other relevant documents There is no separate sub-clause in new clause 31 in line with sub-clause (c) of erstwhile clause 31.
(d) Particulars of repayment of loan or deposit or specified advance in an amount exceeding the limit specified in section 269T received otherwise than by a cheque or bank draft or use of ECS through a bank account  during the previous year.

(i) name, address and Permanent Account Number (if available with the assessee) of the payer;

(ii) amount of loan or deposit or any specified advance received otherwise than by a cheque or bank draft or use of electronic clearing system through a bank account during the previous year.

New reporting requirement –

The reporting requirement in respect of section 269T was earlier required only in case of the person making the repayment of loan or deposit or any specified advance. Under the new clause 31, reportingis also to be done by the recipient.  The recipient has to furnish the name, address and PAN (if available with him) of the payerand the amount of loan or deposit or any specified advance received –

(1)   under sub-clause (d),  in case the repayment   is received otherwise than by a cheque or bank draft or ECS

(2)   under  sub-clause (e), in case repayment is received  by a cheque or bank draft, which is not an account payee cheque or account payee bank draft

 

 

(e) Particulars of repayment of loan or deposit or specified advance in an amount exceeding the limit specified in section 269T received by a cheque or bank draft which is not an account payee cheque or bank draft during the previous year.

(i) name, address and Permanent Account Number (if available with the assessee) of the payer;

(ii) amount of loan or deposit or any specified advance received by a cheque or a bank draft which is not an account payee cheque or account payee bank draft during the previous year.

 

B.     Reporting of adjustments to profit or loss for complying with the provisions of the notified ICDSs and disclosure requirements as per the ICDSs

Members may also note that, last year, vide Notification No 88/2016, dated 29.9.2016, the CBDT had amended Form No 3CD with effect from 1.4.2017 and substituted sub-clause (d) of clause 13 with new sub-clauses (d),(e) and (f) requiring reporting of the adjustments and disclosures mandated as per the notified income computation and disclosure standards (ICDSs). The amended clause 13(d) requires the tax auditor to report whether any adjustment is required to be made to the profits or loss for complying with the provisions of ICDSs notified under section 145(2) and if answer is in affirmative, new clause 13(e) requires reporting of the  standard-wise adjustments made to the profit or loss  for complying with the ICDSs notified u/s 145(2) showing clearly increase/decrease in profits as well as the net effect of such adjustments standard-wise. Further, clause 13(f) requires  reporting of the standard-wise disclosures as per the ICDSs.

Members may kindly note the aforesaid changeswhile filing the tax audit report u/s 44AB of the Income-tax Act, 1961 for the A.Y. 2017-18.

SOURCE- Email from Direct Taxes Committee of ICAI

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