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03 August, 2018

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Form 3CD – Tax Audit Form & Changes Thereto

Form 3CD – Tax Audit Form & Changes Thereto

Every trade with revenue more than a certain threshold undergoes the Income Tax Audit where Qualified Tax Auditors verify the ‘Income Tax Return’ report that is being submitted by evaluating financial records of the enterprises to determine whether the taxpayer complies to the Income tax laws. Income tax Audit comes under the Central Board of Direct Taxes having a yearly report to be submitted to the Income-tax department by the Tax auditors after furnishing their information accordingly. An Assesse’s due date for the submission of Audit Report is on or before 30th September of the Assessment Year. Though, the penalty is given appropriately for the Assesse who fails to submit on or before the due date.

What is Form 3CD?

Form 3CD is a 44 point detailed Statement of Particulars required to be furnished under Section 44AB of the Income Tax Act, 1961 by Tax Auditors. Every Trade that exceeds Rs. 1 Crore (For carrying on business and his Revenue) and Rs. 50 Lakhs (For carrying on Profession and his gross Receipts). Assesse carrying a business or profession which is said to be lower than the considering Profit and gains then he is covered under the various Section Accordingly for Presumptive Income.

As per the rule 6G (2) the Form 3CD has two parts as Part A and Part B.Therefore, there are also two types of forms to be furnished under section 44AB that is Audit Report Form 3CA or 3CB and the other one is a statement showing relevant particulars in Form 3CD. All the details related to various aspects of the trade must be filled at appropriate places in the Form as requested.

  • Know Form 3CA and 3CB

It is mandatory for assessing carrying a business or profession who requires to audit his accounts complied with other law than the Income Tax Law. Then, the Form 3CA needs to be furnished under the Companies Act, 2013.

An assessee who is carrying a business or profession where he does not require to get his accounts to inspect under any other law than the Income Tax Law, that will be able to furnish Form no.3CB.

Either of the Form no. 3CB / 3CA should be furnished according to the assesses’ requirement while along with the Form 3CD which is a part of Tax Audit Report for the Assessment Year.

Amendments made to the Form 3CD

The following are the amendments made to the revised Form no. 3CD:

  • The GSTN number must be given along with the details of other indirect tax registrations.
  • Information about gifts that are chargeable to tax as per of Section 56 of Income Tax Act, 1961.
  • Particulars to make a payment in an amount exceeding the limit specified in Section 269ST of Income Tax Act, 1961.
  • Assesse is required to provide details of expenditure in respect to entities registered and not registered under GST.
  • Requirements related to Transfer pricing as per Section 92CE and 94B of Finance Act, 2017.
  • Assesse is required to inform of whether he should furnish Statement of Financial Transaction (Form No.61 / 61A / 61B ) as per Income Tax Act, 1961.
  • The Form 3CD requires information about whether the taxpayer has received any dividend as per Section 2 of Income Tax Act, 1961.
  • Assesse is required to inform of any Investment in new plant or machinery in any areas in certain States as per Section 32AD of Income Tax Act, 1961.

It is the essential duty of the tax auditor to prepare the Form 3CD accordingly to the requirement and submit the same to the Income Tax Department. The auditor then verifies it and authenticates the furnished information for the Assessment Year.


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