Clause 13 of form 3CD

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Querist : Anonymous

Querist : Anonymous (Querist)

23 September 2010 Plz explain clause 13 all sub clauses except a of form 3CD

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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24 September 2010 13. Amounts not credited to the profit and loss account, being,-

(b) The Proforma credits, drawbacks, refund of duty of customs or excise, or refund of sales tax where such credits, drawbacks or refunds are admitted as due by the authorities concerned;

Any of the above confirmed by the concerned , however not received in not taken in P/L account of the previous year.

(c) Escalation claims accepted during the previous year;

If any claims raised for price revision , and accepted .

(d) Any other item of income,

Other income not taken in P/L account.

(e) Capital receipt, if any.

Any capital receipt not taken in P/L account.

Querist : Anonymous

Querist : Anonymous (Querist)

24 September 2010 in subclause e give some examples like sale of assets has to be mentioned also?

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Asha Kanta Sharma online

Asha Kanta Sharma

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19 July 2024 Form 3CD is a statement of particulars required to be furnished under section 44AB of the Income Tax Act, 1961. Clause 13 of Form 3CD pertains to "Details of the transactions as entered into with the related parties as defined under section 40A(2)(b)".

Let's break down Clause 13 and its sub-clauses (excluding sub-clause (a)), and provide examples where applicable:

### Clause 13 - Details of Transactions with Related Parties (Excluding sub-clause (a))

1. **Sub-clause (b)**: Aggregate amount of transactions and balances with each related party.

- Example: If your business has transactions with a related party such as a subsidiary company or a key management personnel, you need to disclose the aggregate amount of sales, purchases, loans given/received, etc., involving that related party.

2. **Sub-clause (c)**: Details of each transaction with related parties which are not in the ordinary course of business.

- Example: If your business leases office space from a related party at a rate different from market norms, or if it provides services to a related party at non-market rates, these transactions need to be disclosed.

3. **Sub-clause (d)**: Details of outstanding balances of loans or advances from or to related parties.

- Example: If your business has outstanding loans given to a related party, or if it owes money to a related party, you must provide details such as the amount, terms, and conditions of these loans.

4. **Sub-clause (e)**: Transactions or agreements with related parties during the year which have an influence on the financial statements.

- Example: Sale of assets to a related party at a price different from fair market value should be disclosed. Similarly, if there are agreements that could impact the financial position of the business (e.g., a lease agreement with a related party), these need to be mentioned.

5. **Sub-clause (f)**: Any other details relevant for the computation of arm's length price in relation to transactions with related parties under section 92C(2) of the Income Tax Act.

- Example: If your business is involved in international transactions with related parties, details relevant to transfer pricing adjustments or arm's length pricing methods must be disclosed.

### Examples for Sub-clause (e):

- **Sale of Assets**: If your business sold machinery to a related party at a price significantly different from fair market value, this transaction would need to be disclosed under sub-clause (e).

- **Lease Agreements**: If your business leased office space from a related party and the lease terms are not at arm's length (e.g., below-market rent), this agreement should be mentioned.

- **Service Agreements**: Any service agreements with related parties that are not on commercial terms should also be disclosed.

### Conclusion:

Clause 13 of Form 3CD requires comprehensive disclosure of transactions and balances with related parties, ensuring transparency in financial reporting. It is crucial to accurately report these details to comply with tax regulations and to provide a clear understanding of the financial relationships involving related parties.