Latest Changes in Form 3CD

There are a number of changes proposed in Form 3CD relating to tax audit report.

A summary of these key changes is given below. These changes are applicable to all TARs signed on or after 20th Aug 2018!

Summary of key changes in the amended tax audit Form 3CD:

1. Disclosure regarding interest deduction limitation (Sec 94B)

• Whether the assessee has incurred expenditure during the previous year by way of interest or of similar nature exceeding Rs.1cr as referred to in Sec 94B
• If yes, the amount of expenditure by way of interest or of similar nature incurred, EBITDA during the previous year and amount of interest expenditure which exceeds 30% of EBITDA and details of interest expenditure brought forward and carried forward as per Sec 94B(4)

2. Disclosure regarding GAAR Form seeks details as to nature of the impermissible avoidance arrangement and amount (in Rs.) of tax benefit in the previous year arising, in aggregate, to all the parties to the arrangement

3. Details relating income chargeable u/s 56(2)(x)
[Capital asset received without consideration/inadequate consideration] needs to be reported

4. GST registration number to be furnished if the assessee is liable to pay GST 

5. Deduction claimed and deemed profits u/s 32AD [relating deduction for investment in new plant and machinery in notified backward area] needs to reported 

6. Details relating to income chargeable u/s 56(2)(ix) [i.e. advance money forfeited relating transfer of capital asset] needs to be reported

7. Disclosure regarding secondary adjustment (Sec 92CE)

• Whether primary adjustment to transfer price has been made during the previous year and if yes, the clause u/s 92CE under which it has been made as well as the amount
• Whether excess money available with Associated Enterprise (AE) is required to be repatriated to India as per Sec 92CE(2). If yes, whether it has been repatriated within prescribed time and if no, the amount of imputed interest income on such excess money 

8. Details are sought for reporting particulars of receipts or payments made in cash or cheque or bank draft (not being account payee cheque or account payee bank draft) exceeding the limit specified in Sec. 269ST (which puts a limit of Rs. 2 lakh on Cash Transactions)

• Name, address and Permanent Account Number (if available with the assessee)
• Nature of transaction
• Amount and date

9. Seeks following additional details in respect of TDS/TCS returns - List of details/transactions which are not reported the statement of tax deducted or collected

10. Seeks details relating to amounts received as deemed dividend u/s 2(22)(e)

11. Seeks details relating to information furnished in Form No.61 (Statement containing particulars of declaration received in Form No. 60) or Form No. 61A [Statement of Financial Transactions (‘SFT’) by specified reporting persons ] or Form No. 61B (Statement of Reportable Account by prescribed reporting financial institution as per Sec. 285BA)

12. Seeks following details relating to furnishing of CbCR by the assessee or its parent entity or alternate reporting entity

• Whether report has been furnished by the assessee or its parent entity or an alternate reporting entity
• Name of parent entity
• Name of alternate reporting entity (if applicable)
• Date of furnishing of report

13. Seeks GST information relating to break-up of total expenditure of entities registered or not registered under the GST in the following format: