The Central Board of Direct Taxes (CBDT) has reported the Income-tax (Eighth Amendment) Rules, 2025, through Notification No. 23/2025. These rules introduce changes to Form 3CD, the tax audit report mandated under section 44AB of the Income-tax Act, 1961. The same amendment shall come into effect on 1 April 2025, impacting businesses and tax professionals.
Latest Modifications in Form 3CD
1. Insertion of Clause 44BBC in Clause (12)
The amendment adds “44BBC” in Part B, Clause (12) of Form 3CD, ensuring complete reporting for taxpayers.
Omission of Particular Tax Deductions in Clause (19)
The following deduction-corresponding rows have been terminated:
- Section 35AC (Expenditure on eligible projects)
- Section 35CCB (Agro-based programs)
- Section 32AC (Investment in new plant & machinery)
- Section 32AD (Investment in backward areas)
New Reporting Need in Clause (21)
The taxpayers need to report the expenditures pertinent to the settlements for the breach of regulations, as reported by the Central Government.
Adjusted MSME Payment Reporting in Clause (22)
Under the MSMED Act, 2006, a detailed disclosure on payments to Micro and Small Enterprises is-
- Total amount payable to MSMEs under Section 15
- Breakup of timely and delayed payments
- Interest inadmissible under Section 23
Modifications in Clause (26) – Tax Deduction U/S 43B
Clarifications in language and adjustments about different clauses under Section 43B.
Deletion of Clauses (28) & (29)
The same clauses have been eliminated, easing the tax audit reporting framework.
Revision in Loan and Deposit Reporting in Clause (31)
- For reporting the nature of loan or deposit transactions, a drop-down selection is introduced.
- New coding system for different transaction types, including cash payments, receipts, asset transfers, journal entries, and more.
New Clause 36B
The taxpayers in a new clause (36B) are required to declare the information of buyback of shares u/s 2(22)(f)
- The amount received from the buyback
- Cost of acquisition of shares
Read Also: Full Guide to File Form 3CA-3CD/3CB-3CD By Gen Bal Software
The businesses and tax professionals must validate their audit process and ensure compliance with the updated Form 3CD reporting norms, with these changes that come into force from 1st April 2025.
