New Delhi: The Central Board of Direct Taxes (CBDT) has issued new income tax audit rules that take effect on April 1, 2025. Amendments to Form 3CD, notified under the Income-tax (Eighth Amendment) Rules, 2025, tighten disclosure requirements and remove outdated provisions. At the same time, the Board extended the audit filing deadline for FY 2024-25 to October 31, 2025.
Key changes in the tax audit report (Form 3CD) – Section 44BBC added: Businesses under this presumptive taxation scheme, especially those dealing with broadcasting and telecasting rights, must now report that income in the audit. – Obsolete deductions removed: References to defunct sections such as 32AC, 32AD, 35AC and 35CCB have been deleted. – Settlement expenses disclosure: Companies must report payments made to settle contraventions of law. – MSME payment details: A new clause requires detailed reporting of payments to MSMEs, including any delays beyond the statutory 45-day period. – Loans and deposits: Revised formats require transactions to be classified with clear codes to improve traceability. – Buyback reporting: A new clause (36B) mandates disclosure of buybacks covered under Section 115QA. – Clauses 28 & 29 omitted: Redundant clauses have been removed to streamline the form.
Impact on businesses and professionals Experts say these changes signal a move toward greater transparency and stricter compliance.
“The MSME reporting clause is particularly significant. It will force large corporates to closely monitor vendor payments, since delays can now be flagged in tax audits,” said Rakesh Mehra, a Delhi-based chartered accountant.
Enhanced reporting on loans and deposits is meant to increase scrutiny of related-party and high-value cash transactions. “This is the government’s push against unaccounted transactions,” said Sonal Desai, tax partner at a Big Four firm.
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