Significant Amendments to Form 3CD: A Guide to the Income-tax (Eighth Amendment) Rules, 2025

The Central Board of Direct Taxes (CBDT) has officially notified the Income-tax (Eighth Amendment) Rules, 2025 via Notification No. 23/2025. These amendments introduce significant modifications to Form 3CD, the essential tax audit report mandated under Section 44AB of the Income-tax Act, 1961. These changes will take effect from April 1, 2025, impacting businesses and tax professionals across the country.

Key Amendments to Form 3CD

1. Insertion of Clause 44BBC in Clause (12)

The amendment adds “44BBC” in Part B, Clause (12) of Form 3CD, ensuring comprehensive reporting for taxpayers.

2. Omission of Specific Deductions in Clause (19)

The following deduction-related rows have been removed:

3. New Reporting Requirement in Clause (21)

Taxpayers are now required to report expenditures related to settlements for contraventions of laws as notified by the Central Government.

4. Revised MSME Payment Reporting in Clause (22)

A detailed disclosure on payments to Micro and Small Enterprises under the MSMED Act, 2006, is now included, covering:

5. Modifications in Clause (26) – Deduction Under Section 43B

Clarifications have been provided in language and adjustments made in reference to different clauses under Section 43B.

6. Omission of Clauses (28) & (29)

These clauses have been removed, simplifying the tax audit reporting structure.

7. Changes in Loan and Deposit Reporting in Clause (31)

A new drop-down selection has been introduced for reporting the nature of loan or deposit transactions. A new coding system for various transaction types is also implemented, which includes cash payments, receipts, asset transfers, journal entries, and more.

8. New Clause 36B: Reporting Buyback of Shares

A new clause (36B) requires taxpayers to disclose details regarding the buyback of shares under Section 2(22)(f), comprising:

With these amendments set to take effect from April 1, 2025, it is crucial for businesses and tax professionals to review their audit procedures and ensure compliance with the updated Form 3CD reporting norms.

Official copy of the notification has been attached

Attached File: 671907_24712_cbdt_nn__28_03_2025.pdf