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Date: 2025-03-28 Category: Extra Ordinary State: Union Government Country: India

Notification u/s 295 of the Income Tax Act, 1961

Issued by Ministry of Finance · Department of Revenue

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Executive Summary & Key Takeaways

What it means

  • The notification issued by the Central Board of Direct Taxes (CBDT) amends the Income-tax Rules, 1962, specifically related to Form 3CD (Part B) which is a part of the tax audit report.
  • These amendments are called the Income-tax (Eighth Amendment) Rules, 2025.
  • The amendments will come into effect from April 1, 2025.

Key Changes

  • Insertion of "44BBC" after "44BBB" in clause (12) of Form 3CD.
  • Omission of rows labelled “32AC”, “32AD”, “35AC” and “35CCB” in clause (19).
  • Insertion of a new row in clause (21)(a) related to expenditure incurred to settle proceedings initiated in relation to contravention under such law as notified by the Central Government in the Official Gazette.
  • Substitution of clause (22) related to payments to Micro and Small Enterprises under the MSMED Act, 2006, detailing inadmissible interest and amounts to be paid.
  • Amendments to clause (26) by omitting certain words and substituting others to clarify allowability of expenses.
  • Omission of clauses (28) and (29).
  • Substitution of item (ii) in clauses (31)(a) and (31)(b) with a requirement to provide a code for the nature of the amount of loan or deposit taken or accepted.
  • Substitution of item (ii) in clause (31)(c) with a requirement to provide a code for the nature of the amount of each repayment of loan or deposit or any specified advance.
  • Insertion of a note after clause (31) defining codes for the nature of amount/receipt/repayment, including codes for cash payments, cash receipts, payments/receipts via non-account payee cheques, asset/liability transfers, journal entries, and other modes.
  • Insertion of clause (36B) requiring disclosure of details related to buyback of shares as referred to in section 2(22)(f) of the Income-tax Act, including the amount received and the cost of acquisition of shares bought back.

Impact Analysis

Taxpayers/Assessees

  • Omission of rows labelled “32AC”, “32AD”, “35AC” and “35CCB” in clause (19) indicates the removal of reporting requirements for specific deductions, potentially simplifying the reporting process for some taxpayers.

Tax Professionals/Auditors

  • Training and guidance may be required to ensure consistent application of the new rules.

Government/Tax Authorities

  • The government will need to notify the laws under which settlement expenditure can be claimed for the clause (21)(a) insertion.

Action Items

  • Seek professional advice to clarify any ambiguities or uncertainties related to the new rules.

Key Entities Referenced

Central Board of Direct Taxes (CBDT): The issuer of the notification and the authority responsible for making rules related to income tax. Income-tax Act, 1961: The principal legislation governing income tax in India. Sections 44AB and 295 provide the CBDT with the power to make rules. Income-tax Rules, 1962: The detailed rules framed under the Income-tax Act, 1961, which are being amended by this notification. Form 3CD: A form that is part of the tax audit report, containing detailed information about the assessee's financial transactions. MSMED Act, 2006: Micro, Small and Medium Enterprises Development Act, 2006. The notification includes changes related to payments to micro and small enterprises as defined under this act.
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रजजस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-डी.एल.-अ.-28032025-262076 CG-DxLx-xEG-I2D8H0x3x2x0 25-262076 xxxGIDExxx ऄसाधारण EXTRAORDINARY भाग II—खण् ड 3—ईप-खण्ड (i) PART II—Section 3—Sub-section (i) प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 168] नइ ददल्ली, िुक्रिार, माचड 28, 2025/चत्रै 7, 1947 No. 168] NEW DELHI, FRIDAY, MARCH 28, 2025/CHAITRA 7, 1947 जित्त मत्रं ालय (राजस्ट्ि जिभाग) (केन्द्रीय प्रत्यक्ष कर बोडड) ऄजधसचू ना नइ ददल्ली, 28 माच,ड 2025 अयकर सा.का.जन. 207(ऄ).—केन्द्रीय प्रत्यक्ष कर बोडड, अयकर ऄजधजनयम, (1961 का 43) की धारा 44कख और धारा 295 द्वारा प्रदत्त िजियों का प्रयोग करते हुए, अयकर जनयम, 1962 का और संिोधन करने के जलए जनम्नजलजखत जनयम बनाता ह,ै ऄथाडत:्- 1. संजक्षप्त नाम और प्रारंभ.-- (1) आन जनयमों का संजक्षप्त नाम अयकर (अठिां संिोधन) जनयम, 2025 ह ै। (2) य े राजपत्र म ें1 ऄप्रलै , 2025 स े प्रिृत होंग े । 2. अयकर जनयम, 1962 के पररजिष्ट 2 के प्ररूप संख्या 3गघ के भाग ख म,ें –– (क) खडं (12) में, “44खखख” ऄंकों और ऄक्षरों के पश्चात “44खखग” ऄंक और ऄक्षर ऄंत:स्ट्थाजपत दकए जाएंग;े (ख) खडं (19) में, “32कग”, “32कघ”, “35कग” और “35गगख” नामक पंजियों का लोप दकया जाएगा; (ग) सारणी के खंड (21) के ईपखंड (क) म,ें “कोइ फायदा या पररलजधध प्रदान करने के जलए ईपगत व्यय” िधदों 2221 GI/2025 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] स े प्रारंभ होने िाली पंजि के पश्चात, “ऐसी जिजध के ऄधीन ईल्लघं न के संबंध म ें प्रारंभ की गइ कायडिाजहयों को जनपटान े के जलए ईपगत व्यय, जो आस जनजमत्त राजपत्र म ें केंरीय सरकार द्वारा ऄजधसूजचत दकए जाए” िधदों िाली पंजि ऄंतःस्ट्थाजपत की जाएगी; (घ) खंड (22) के स्ट्थान पर जनम्नजलजखत खडं रखा जाएगा- “22. (i) सूक्ष्म, लघ ु और मध्यम ईद्यम जिकास ऄजधजनयम, 2006 (एमएसएमइडी ऄजधजनयम) की धारा 23 के ऄधीन ऄननुज्ञेय धयाज की रकम; या (ii) एमएसएमइडी ऄजधजनयम की धारा 15 म ें यथा जनर्ददष्ट दकसी सूक्ष्म या लघ ु ईद्यम को पूिड िर्ड के दौरान संदत्त की जाने िाली कुल रकम; (iii) ईपयुडि (ii) म ें जनर्ददष्ट रकम की,- (क) एमएसएमइडी ऄजधजनयम की धारा 15 के ऄधीन ददए गए समय तक संदत्त; (ख) एमएसएमइडी ऄजधजनयम की धारा 15 के ऄधीन ददए गए समय तक संदत्त और पूिड िर् ड के जलए ऄननुज्ञेय, रकम।"; (ङ) खडं (26) में, - (i) “खंड (क), खंड (ख), खंड (ग), खंड (घ), खडं (ङ), खडं (च) या खंड (छ)” िधदों, कोष्ठकों और ऄक्षरों का लोप दकया जाएगा; (ii) ईप-खण्ड (ऄ) म,ें “ऄनज्ञु ात” िधद के स्ट्थान पर “ऄनुज्ञेय” िधद रखा जाएगा; (iii) ईप-खंड (अ) म,ें “और” िधद के स्ट्थान पर, “और (धारा 43ख के खंड (ज) स े जभन्न खंडों के जलए)” िधद, कोष्ठक, ऄक्षर और ऄंक रखे जाएंगे; (च) खडं (28) और खडं (29) का लोप दकया जाएगा; (छ) खडं (31) के ईप-खंड (क) और (ख) में, मद (ii) के स्ट्थान पर, जनम्नजलजखत मद रखी जाएगी, ऄथाडत्:- जलए गए या स्ट्िीकृत प्रत्येक ऋण या जनक्षेप की रकम और ऐसी रकम की “(ii) प्रकृजत का कोड, जैसा रटप्पण 1 म ें ददया गया ह ै ; [ड्रॉपडाईन ईपबंजधत दकया जाना ह]ै”; (ज) खडं (31) के ईपखडं (ग) की मद (ii) के स्ट्थान पर, जनम्नजलजखत मद रखी जाएगी, ऄथातड ्:- “(ii) ऋण या जनक्षेप या दकसी जिजनर्ददष्ट ऄजिम के प्रत्येक प्रजतदाय की रकम और ऐसी रकम की प्रकृजत का कोड, जैसा रटप्पण 1 म ें ददया गया ह ै ; [ड्रॉपडाईन ईपबंजधत दकया जाना ह]ै”; (झ) खडं (31) के पश्चात ् जनम्नजलजखत रटप्पण ऄतं ःस्ट्थाजपत दकया जाएगा, ऄथाडत:्- “रटप्पण 1.– रकम/ प्राजप्त/ प्रजतदाय की प्रकृजत का कोड जनम्नानसु ार ह ै – क्र. सं. रकम या प्राजप्त या प्रजतदाय की प्रकृजत कोड (1) (2) (3) 1. नकद संदाय ए 2. नकद प्राजप्त बी 3. खाते में ऄसंदत्त चेक के माध्यम से संदाय सी[भाग II—खण् ड 3(i)] भारत का राजपत्र : ऄसाधारण 3 4. खाते में ऄसंदत्त चेक के माध्यम से प्राजप्त डी 5. अजस्ट्त का ऄंतरण आ 6. दाजयत्ि का ऄंतरण एफ 7. अजस्ट्तयों का संपररितडन जी 8. देनदाररयों का संपररितडन एच 9. जनडल प्रजिजष्ट [डेजबट] अइ 10. जनडल प्रजिजष्ट [क्रेजडट] ज े 11. कोइ ऄन्द्य ढंग [डेजबट] के 12. कोइ ऄन्द्य ढंग [क्रेजडट] एल”; (ञ) खंड (36क) के पश्चात ् जनम्नजलजखत खंड ऄतं ःस्ट्थाजपत दकया जाएगा, ऄथाडत्:- “36ख. क्या जनधाडररती को धारा 2 के खंड (22) के ईपखंड (च) में यथाजनर्ददष्ट िेयरों के क) पुनक्रडय के जलए कोइ रकम प्राप्त हुइ ह?ै (हां/नहीं) ख) यदद हां, तो कृपया जनम्नजलजखत जििरण प्रस्ट्तुत करें: (i) प्राप्त रकम (रु. म)ें (ii) िापस क्रय गए िेयरों के ऄजनड की लागत”। [ऄजधसूचना स.ं 23/2025/ एफ. संख्या 370142/10/2025-टीपीएल] अिीर् कुमार ऄििाल, ईप सजचि रटप्पण : मूल जनयम भारत के राजपत्र ऄसाधारण, भाग II, खंड 3, ईपखडं (ii) म ें ऄजधसूचना संख्या का.अ. 969 (ऄ), तारीख 26 माचड, 1962 द्वारा प्रकाजित दकए गए थ े और ऄंजतम बार ऄजधसूचना संख्या सा.का.जन. 195(ऄ), तारीख 27 माचड, 2025 द्वारा संिोजधत दकए गए थे। MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) NOTIFICATION New Delhi, the 28th March, 2025 INCOME-TAX G.S.R. 207(E).––In exercise of the powers conferred by section 44AB and section 295 of the Income-tax Act (43 of 1961), the Central Board of Direct Taxes, hereby, makes the following rules further to amend the Income-tax Rules, 1962, namely:- 1. Short title and commencement.– (1) These rules may be called the Income-tax (Eighth Amendment) Rules, 2025. (2) They shall come into force on the 1st day of April, 2025. 2. In the Income-tax Rules, 1962, in Appendix II, in Form no. 3CD, in Part B, –– (a) in clause (12), after the figures and letters “44BBB,”, the figures and letters “44BBC” shall be inserted; (b) in clause (19), the rows labelled as “32AC”, “32AD”, “35AC” and “35CCB” shall be omitted;4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] (c) in the table, in clause (21), in sub-clause (a), after the row starting with the words “Expenditure incurred to provide any benefit or perquisite”, a row with the words “Expenditure incurred to settle proceedings initiated in relation to contravention under such law as notified by the Central Government in the Official Gazette in this behalf” shall be inserted; (d) for clause (22), the following clause shall be substituted – “22. (i) Amount of interest inadmissible under section 23 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act); or (ii) Total amount required to be paid to to a micro or small enterprise, as referred to in section 15 of the MSMED Act, during the previous year; (iii) Of amount referred to in (ii) above, amount - (a) paid up to time given under section 15 of the MSMED Act; (b) not paid up to time given under section 15 of the MSMED Act and inadmissible for the previous year.”; (e) in clause (26), – (i) the words, brackets and letters “clause (a), (b), (c), (d), (e), (f) or (g) of” shall be omitted; (ii) in sub-clause (A), for the word “allowed”, the word “allowable” shall be substituted; (iii) in sub-clause (B), for the words “and was”, the words, brackets, letters and figures, “and (for clauses other than clause (h) of section 43B) was,” shall be substituted; (f) clauses (28) and (29) shall be omitted; (g) in clause (31), in sub-clauses (a) and (b), for item (ii), the following item shall be substituted, namely :– Amount of each loan or deposit taken or accepted and ―(ii) code of the nature of such amount, as given in Note 1; [Dropdown to be provided]‖; (h) in clause (31), in sub-clause (c), for item (ii), the following item shall be substituted, namely :– ―(ii) Amount of each repayment of loan or deposit or any specified advance and code of the nature of such amount, as given in Note 1; [Dropdown to be provided]‖; (i) after clause (31), the following Note shall be inserted, namely:–– “Note 1. – The code for the nature of amount/ receipt/ repayment is as below – S. No Nature of amount or receipt or repayment Code (1) (2) (3) 1. Cash payment A 2. Cash receipt B 3. Payment through non account payee cheque C 4. Receipt through non account payee cheque D 5. Transfer of asset E 6. Transfer of liability F 7. Conversion of assets G[भाग II—खण् ड 3(i)] भारत का राजपत्र : ऄसाधारण 5 8. Conversion of liabilities H 9. Journal entry [Debit] I 10. Journal entry [Credit] J 11. Any other mode [Debit] K 12. Any other mode [Credit] L”; (j) after clause (36A), the following clause shall be inserted, namely :– Whether the assessee has received any amount for buyback of shares as “36B. a) referred to in sub-clause (f) of clause (22) of section 2? (Yes/No) b) If yes, please furnish the following details: (i) Amount received (in Rs.) (ii) Cost of acquisition of shares bought back”. [Notification No. 23/2025/F. No. 370142/10/2025-TPL] ASHISH KUMAR AGRAWAL, Dy. Secy. Note : The principal rules were published in the Gazette of India Extraordinary, Part III, section 3, sub-section (ii), vide notification number S.O. 969 (E), dated the 26th March, 1962 and last amended vide notification number G.S.R. 195(E) dated the 27th March, 2025 Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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