Form No. 24 is a mandatory audit report under section 59(4) of the Income-tax Act, 2025, applicable to non-residents and foreign companies earning royalty or fees for technical services (FTS) from India through a Permanent Establishment (PE) or fixed place of profession. The form must be certified by a qualified accountant and furnished annually before the due date of return filing. It ensures proper computation of income on a net basis by allowing only those expenses that are directly attributable to the Indian PE. The audit requires detailed documentation, including agreements, notes on intangible assets, records of PE activities, and books of account. The filing process involves preparation, certification, digital submission by the accountant, and acceptance by the assessee. Its purpose is to ensure accurate attribution of income and prevent excessive deduction claims. Upon submission, the reported income forms part of the assessment, ensuring transparency, compliance, and correct taxation of cross-border income.
FAQ’s pertaining to Income Tax Form No. 24: Audit Report under section 59 of Income-tax Act, 2025 for computation of royalty and fee for technical services in the case of nonresident (not being a company) or a foreign company
Form of Audit Report under Section 59(4) of the Income-tax Act, 2025.
| Name of Form as per I.T. Rules, 1962 | Form 3CE | Name of Form as per I.T. Rules, 2026 | Form No. 24 |
| Corresponding Section of I.T.Act, 1961 | 44DA | Corresponding section of I.T.Act, 2025 | 59 |
| Corresponding Rule of I.T. Rules, 1962 | Rule 6GA | Corresponding Rules of I.T. Rules, 2026 | Rule 43 |
Q1. What is Form No. 24?
Ans:- Form No. 24 is a prescribed audit report required to be furnished under Rule 43 read with Section 59(4) of the Income-tax Act, 2025. It is applicable to non-residents or foreign companies earning income by way of royalty or fees for technical services (FTS) from India through a Permanent Establishment (PE) or a fixed place of profession situated in India.
Q2. Who should file Form No. 24?
Ans:- Form No. 24 is required to be furnished by:
- Non-resident individuals
- Foreign companies
- Any other non-resident entities
who earn royalty or fees for technical services from India and where such income is effectively connected with a Permanent Establishment or fixed place of profession in India. The form is certified by an Accountant as defined in section 515(3)(b) of the Income-tax Act, 2025.
Q3. Is Form No. 24 compulsory?
Ans:- Yes. Furnishing of Form No. 24 is mandatory where income by way of royalty or fees for technical services is taxable under Section 59 through a Permanent Establishment or fixed place of profession in India.
Q4. When does the requirement of furnishing Form No. 24 arise?
Ans:- The requirement arises when a non-resident assessee or foreign company earns royalty or fees for technical services from India under an agreement with the Government of India or an Indian concern, and such income is effectively connected with a Permanent Establishment or fixed place of profession in India.
Q5. What documents / information are required to prepare Form No. 24?
Ans:- The Chartered Accountant will require:
a. Complete books of account and records relating to the business of the Permanent Establishment (PE) or fixed place of profession in India for the relevant tax year.
b. Accurate computation of income earned by way of royalty or fees for technical services (FTS), ensuring such income is effectively connected with the Indian PE.
c. Documentation supporting the claim for expenditure (excluding those not allowable under Section 59) that is strictly attributable to the PE or fixed place of profession.
d. A copy of the agreement with the Government of India or the Indian concern under which the royalty or FTS is earned (Annexure A-2).
e. A detailed note on the intangible property (know-how, copyrights, patents, etc.) used, or the specific contract for which the fees are payable (Annexure A-3).
f. A descriptive note outlining the activities of the PE or the fixed place of profession in India (Annexure A-4).
g. Details of any change in the method of accounting employed compared to the previous year and its effect on profit or loss (Annexure A-1).
h. The Accountant’s Membership Number, Firm Registration Number, and a generated Unique Document Identification Number (UDIN) for the electronic certification.
Q6. What is the due date for furnishing Form No. 24?
Ans:- Form No. 24 is required to be furnished annually, at least one month prior to the due date for furnishing the return of income under Section 263(1) of the Income-tax Act, 2025.
Q7. What is the effect of furnishing Form No. 24?
Ans:- Furnishing of Form No. 24 enables computation of royalty or fees for technical services on a net income basis after allowing only such expenses as are attributable to the Permanent Establishment or fixed place of profession in India.
Q8. What is the structure of Form No. 24?
Ans:- Form No. 24 consists of:
– Main Audit Report: The core certification under Section 59 of the Income-tax Act, 2025, where the accountant certifies the amount of royalty or fees for technical services (FTS) and its effective connection with the Permanent Establishment (PE) or fixed place of profession in India.
– Annexure – Part A: This section captures the General Particulars of the Assessee, including their name, address, Permanent Account Number (PAN), and the relevant tax year.
– Annexure – Part B: This section contains the Statement of Particulars relating to income by way of royalty or fees for technical services, detailing the books of account, method of accounting, details of the payer, and head-wise expenditure attributable to the PE.
– Specific Annexures (A-1 to A-4): Depending on the responses in Part B, additional detailed notes must be attached, such as the copy of the agreement (Annexure A-2), notes on intangible property (Annexure A-3), and notes on the specific activities of the PE (Annexure A-4).
9. What is the process flow of filing Form No. 24?
Ans:- The process flow includes:
a. The process starts with identifying whether the non-resident or foreign company has a Permanent Establishment (PE) or a fixed place of profession in India during the tax year.
b. All income earned via royalty or fees for technical services (FTS) effectively connected to the PE must be compiled, along with expenditures strictly attributable to the PE.
c. The assessee must engage an “Accountant” as defined in Section 515(3)(b) to audit these accounts and verify the correctness of the income computation.
d. The accountant prepares the audit report and mandatory annexures, including Annexure A-2 (Agreement copy), Annexure A- 3 (Note on intangibles/contracts), and Annexure A-4 (Note on PE activities).
e. The accountant logs into the e-filing portal to fill out the form, ensuring the inclusion of their Membership Number, Firm Registration Number, and a generated Unique Document Identification Number (UDIN).
f. The accountant must digitally sign the form using their Digital Signature Certificate (DSC) to upload it.
g. After the Accountant uploads the form, it appears in the taxpayer’s worklist; the process is only complete once the assessee logs in and “Accepts” the form.
10. What is the outcome after furnishing Form No. 24?
Ans:- Upon furnishing and acceptance of Form No. 24, the income by way of royalty or fees for technical services is assessed under Section 59 on a net basis, forming part of the assessment record.
11. Why is Form No. 24 important?
Ans:- Form No. 24 is a statutory audit certificate that ensures correct attribution of income and expenses and verifies that income is effectively connected to the Permanent Establishment or fixed place of profession in India. It prevents excess deduction of expenses and ensures correct taxation of royalty or fees for technical services earned by non-residents.
Guidance Note pertaining to Income Tax Form No. 24: Audit Report under section 59 of Income-tax Act, 2025 for computation of royalty and fee for technical services in the case of nonresident (not being a company) or a foreign company
Form No. 25 [corresponding to erstwhile Form 3C] (Form of daily case register)
Purpose:
Form No. 25 is a daily case register prescribed for medical professionals under Rule 46 of the Income-tax Rules, 2026.
Its purpose is to maintain a daily record of the services rendered to patients, including the name of the patient, nature of service, fees charged, and the date of receipt of such fees.
Who Should Maintain:
Form No. 25 is mandatory for every person engaged in the medical profession, except in the following cases:
1. if total gross receipts do not exceed one lakh fifty thousand rupees in any one of the three preceding tax years
2. for a newly set up profession, where total gross receipts are not likely to exceed the said amount
Maintenance of case register in Form No. 25 is in addition to maintenance of prescribed books of account under Rule 46.
Frequency & Due Dates:
Form No. 25 is a daily register. However, it is not required to be furnished to the Department and hence has not due date.
Structure of Form No. 25:
Form No. 25 is maintained as a tabular register, containing detailed particulars of all professional activities and fees received.
The columns prescribed under the Form include:
1. Serial Number / Case Number
2. Date
3. Name of the Patient
4. Nature of Professional Services Rendered
5. Fees Received
6. Date of Receipt of Fees
Brief note on broad or qualitative changes proposed:
No substantive updates have been proposed.
Challenges and Solutions:
No challenges were highlighted by any stakeholders during consultations.
Common Changes made across Forms:
1. To make Forms system-friendly and enable e-filing and uploading, certain anomalies found due to grouping of Name, Designation, Address, PAN and Aadhaar number have been separated into different boxes.
2. Assessment / Financial / Previous year or years have been replaced with Tax year or years, wherever appearing in the Form/Annexure.
3. Sections, Clauses and Schedules changes as per the Income-tax Act, 2025.
4. Currency symbol “Rs.” has been replaced with “₹”.
