I. Changes in Tax Audit Report – Form 3CD relating to ICDS Reporting Adjustments

CBDT Notification No.88/2016 dt. 29 Sept. 2016 – ICDS Rules 2016

The CBDT has amended/ revised Form 3CD, applicable from AY 2017-18 (i.e. corresponding to Financial/ Previous Year 2016-17) to facilitate changes relating to ICDS Reporting Adjustments thru Income-tax (23rd Amendment) Rules, 2016 vide Notification No. 88/2016.

CBDT has amended Form 3CD w.e.f 1 Apr. 2017 by substituting clause 13(d) with new clauses 13(d), (e) and (f) requiring reporting of the adjustments and disclosures mandated by the ICDS.

Amended clause 13(d) requires reporting by tax auditor on adjustment required in profits or loss for complying with the ICDS provisions. New clause 13(e) requires ICDS-wise reporting of the adjustments made in profit or loss for ICDS compliance, showing clearly increase/ decrease in profits as well as the overall net effect of such adjustments. Further, clause 13(f) requires reporting of the ICDS-wise disclosures.

In clause 13 D of 3CD Report, for sub-clause (d), the following shall be substituted, namely —

  • Sub-clause (d) :

Whether any adjustment is required to be made to the profits or loss for complying with the provisions of income computation and disclosure standards notified under section 145(2)

  • Sub-clause (e) :

If answer to (d) above is in the affirmative, give details of such adjustments:

Increase in profit (Rs.) Decrease in profit(Rs.) Net effect (Rs.)
ICDS I Accounting Policies
ICDS II Valuation of Inventories
ICDS III Construction Contracts
ICDS IV Revenue Recognition
ICDS V Tangible Fixed Assets
ICDS VI Changes in Foreign Exchange Rates
ICDS VII Governments Grants
ICDS VIII Securities
ICDS IX Borrowing Costs
ICDS X Provisions, Contingent Liabilities and Contingent Assets
Total
  • Sub-clause (f) :

Disclosure as per ICDS:

(i) ICDS I-Accounting Policies
(ii) ICDS II-Valuation of Inventories
(iii) ICDS III-Construction Contracts
(iv) ICDS IV-Revenue Recognition
(v) ICDS V-Tangible Fixed Assets
(vi) ICDS VII-Governments Grants
(vii) ICDS IX Borrowing Costs
(viii ) ICDS X-Provisions, Contingent Liabilities and Contingent Assets”.

II. Amendments in “Clause 31 of Tax Audit Report – Form 3CD relating to particulars required under IT Section 269SS/ 269T” – e.f. 19 Jul. 2017

The CBDT has notified amendments in “Clause 31 relating to particulars required under IT Section 269SS/ 269T” in the Tax Audit Report Form 3CD prescribed under IT Section 44AB, w.e.f. 19 Jul. 2017, as under:

Modification in IT Form 3CD w.e.f. 19 Jul. 2017: CBDT Notification 58/2017 dt. 3 Jul. 2017

G.S.R. 821(E).—In exercise of the powers conferred by section 44AB read with section 295 of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (a) These rules may be called the Income-tax (18th Amendment) Rules, 2017.

(b) They shall come into force from the 19th day of July 2017.

2. In the Income-tax Rules, 1962, in Appendix II, in Form No. 3CD, for serial number 31 and the entries relating thereto the following shall be substituted, namely:—

  • Sub-clause 31 (a) :

Particulars of each loan or deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year:—

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

(ii) amount of loan or deposit taken or accepted;

(iii) whether the loan or deposit was squared up during the previous year;

(iv) maximum amount outstanding in the account at any time during the previous year;

(v) whether the loan or deposit was taken or accepted by cheque or bank draft or use of electronic clearing system through a bank account;

(vi) in case the loan or deposit was taken or accepted by cheque or bank draft, whether the same was taken or accepted by an account payee cheque or an account payee bank draft.

Clarification – 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 accepted otherwise than by account payee cheque or bank draft.

  • Sub-clause 31 (b) :

Particulars of each specified sum in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the person from whom specified sum is received;

(ii) amount of specified sum taken or accepted;

(iii) whether the specified sum was taken or accepted by cheque or bank draft or use of electronic clearing system through a bank account;

(iv) in case the specified sum was taken or accepted by cheque or bank draft, whether the same was taken or accepted by an account payee cheque or an account payee bank draft.

Clarification – 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.

(Particulars at (a) and (b) need not be given in the case of a Government company, a banking company or a corporation established by the Central, State or Provincial Act.)

  • Sub-clause 31 (c) :

Particulars of each repayment of loan or deposit or any specified advance in an amount exceeding the limit specified in section 269T made during the previous year:—

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

(ii) amount of the repayment;

(iii) maximum amount outstanding in the account at any time during the previous year;

(iv) whether the repayment was made by cheque or bank draft or use of electronic clearing system through a bank account;

(v) in case the repayment was made by cheque or bank draft, whether the same was taken or accepted by an account payee cheque or an account payee bank draft.

Clarification – 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.

  • Sub-clause 31 (d) :

Particulars of repayment of loan or deposit or any specified advance in an amount exceeding the limit specified in section 269T received otherwise than by a cheque or bank draft or use of electronic clearing system through a bank account during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the lender, or depositor or person from whom specified advance is received;

(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.

  • Sub-clause 31 (e) :

Particulars of repayment of loan or deposit or any 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 account payee bank draft during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the lender, or depositor or person from whom specified advance is received;

(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.

Clarification – 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, reporting is also to be done by the recipient. The recipient has to furnish the name, address and PAN (if available with him) of the payer and 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

(Particulars at (c), (d) and (e) need not be given in the case of a repayment of any loan or deposit or any specified advance taken or accepted from the Government, Government company, banking company or a corporation established by the Central, State or Provincial Act)”.

Note : The principal rules were published vide notification number S.O. 969(E), dated the 26th March, 1962 and last amended by Income-tax (17th Amendment) Rules, 2017 vide notification number G.S.R. 642(E), dated the 27th June, 2017.

Corrigendum to Notification 58/2017 Revised Form 3CD: CBDT Notification 60/2017 dt. 6 Jul. 2017

G.S.R. 841(E).—In the notification of the Government of India, Ministry of Finance, Department of Revenue (Central Board of Direct Taxes), number 58/2017, dated the 3rd July, 2017, published vide number G.S.R. 821(E) dated the 3rd July, 2017, in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), at page 4,—

(i) in clause (d), in sub-clause (i),—

for “name, address and Permanent Account Number (if available with the assessee) of the lender, or depositor or person from whom specified advance is received;” read as “name, address and Permanent Account Number (if available with the assessee) of the payer;”

(ii) in clause (e), in sub-clause (i),–

for “name, address and Permanent Account Number (if available with the assessee) of the lender, or depositor or person from whom specified advance is received;” read as “name, address and Permanent Account Number (if available with the assessee) of the payer;”

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