Key Changes in Form 3CD

The CBDT vide notification no. 23/2025 has issued the Income Tax (Eighth Amendment) Rules , 2025 introducing significant amendments in Form 3CD.

The notification shall come into force with effect from 1st April 2025.

Key Amendments as per the notification

The list of Key Amendments in Form 3CD are detailed hereunder:

Amendment to clause 12

In clause 12 Section 44BBC has been inserted after Section 44BBB

Section 44BBC is relating to Special provision for computing profits and gains of business of operation of cruise ships in case of non-residents.
This section was inserted by the Finance (No.2) Act, 2024 and the section shall come into effect from 1st April 2025.

Section 44BBC of the Income Tax Act is reproduced hereunder for your reference:

44BBC. (1) Notwithstanding anything to the contrary contained in sections 28 to 43A, in the case of an assessee, being a non-resident, engaged in the business of operation of cruise ships subject to such conditions as may be prescribed, a sum equal to twenty per cent of the aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession”.

(2) The amounts referred to in sub-section (1) shall be the following, namely:—

(a) the amount paid or payable to the assessee or to any person on his behalf on account of the carriage of passengers; and

(b) the amount received or deemed to be received by or on behalf of the assessee on account of the carriage of passengers.

Amendment to clause 19

In clause 19 the following sections have been omitted from the table:

• Section 32AC (Investment in new plant & machinery)
• Section 32AD (Investment in new plant or machinery in notified backward areas in certain States)
• Section 35AC (Expenditure on eligible projects or schemes) and
• Section 35CCB (Expenditure by way of payment to associations and institutions for carrying out programmes of conservation of natural resources.)

Amendment to clause 21

In clause 21 sub-clause (a) after 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;

By insertion of this amendment tax auditors are now required to report any expense incurred by the assessees to settle a claim, pay fines or penalties with respect to litigation or to resolve any proceedings initiated in relation to notified laws.

Amendment to clause 22

The earlier clause 22 has been omitted and a new clause has been inserted with respect to disclosures to be made regarding MSME.

The amended clause 22 of Form 3CD is as under

(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.”;

Amendment to clause 26

Clause 26 of the Form 3CD requires the tax auditor to report the details with respect to Section 43B. Section 43B of the Act allows deductions only when it is paid i.e deduction is allowed only on actual payment basis.

The deductions which are allowed on actual payment basis as per Section 43B are reproduced hereunder:

(a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or

(b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, or

(c) any sum referred to in clause (ii) of sub-section (1) of section 36, or

(d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution or a State financial corporation or a State industrial investment corporation, in accordance with the terms and conditions of the agreement governing such loan or borrowing, or

(da) any sum payable by the assessee as interest on any loan or borrowing from ²⁷[such class of non-banking financial companies as may be notified by the Central Government in the Official Gazette in this behalf], in accordance with the terms and conditions of the agreement governing such loan or borrowing, or

(e) any sum payable by the assessee as interest on any loan or advances from a scheduled bank or a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank in accordance with the terms and conditions of the agreement governing such loan or advances, or

(f) any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee, or

(g) any sum payable by the assessee to the Indian Railways for the use of railway assets,

(h) any sum payable by the assessee to a micro or small enterprise beyond the time limit specified in section 15 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006),

The following amendment are made 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;

Removal of clauses

Clause 28 and clause 29 has been omitted from Form 3CD.

Clause 28 – Whether during the previous year the assessee has received any property, being share of a company not being a company in which the public are substantially interested, without consideration or for inadequate consideration as referred to in section 56(2)(viia), if yes, please furnish the details of the same.

Clause 29 – Whether during the previous year the assessee received any consideration for issue of shares which exceeds the fair market value of the shares as referred to in section 56(2)(viib), if yes, please furnish the details of the same.

Amendment to Clause 31

Sub clause (a), (b) and (c) for item (ii) has been substituted with new the following new words and note 1 has been added for the nature of amount/receipt / repayment with a dropdown.

In sub clause (a) and (b) for item (ii) the following item have been substituted namely:

(ii) Amount of each loan or deposit taken or accepted and code of the nature of such amount, as given in Note 1;

In sub clause (c) for item (ii) the following item have been 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;

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
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

Amendment to Clause 36

After clause 36A, Clause 36B shall be inserted. Clause 36B is relating to disclosure of buyback of shares as referred to in Section 2(22)(f).

Clause 2(22)(f) of the Income Tax is as follows:

[(f) any payment by a company on purchase of its own shares from a shareholder in accordance with the provisions of section 68 of the Companies Act, 2013 (18 of 2013);]

The sub-clause (f) has been made effect from 01-10-2024.

In July 2024 budget, the H’ble Finance Minister announced that the buyback of shares will not be taxed in the hands of the company. It will be taxed in the hands of the recipient as in the same manner dividends are being taxed. Hence, the amount received from the buyback of shares will be treated as Deemed dividend and will be taxable in the hands of the recipient with effect from 01-10-2024.

In order to ensure the proper reporting of buyback of shares, the following disclosures are to be in made in Clause 36B.

36B. a) Whether the assessee has received any amount for buyback of shares as 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”

The official copy of the notification is attached hereunder for your ready reference

notification-no-23-2025