The tax audit report under Sec�on 44AB of the Income-tax Act, 1961, is detailed in Form 3CD.
This
form contains various clauses (totaling 44) where specific informa�on is required to be provided by
the tax auditor. Below are the first 22 clauses of Form 3CD along with a brief explana�on of each:
Part A – General Informa�on
1. Clause 1: Name of the Assessee
o The name of the person/en�ty being audited.
2. Clause 2: Address
o The current address of the assessee.
3. Clause 3: Permanent Account Number (PAN)
o The PAN of the assessee.
4. Clause 4: Registra�on Number (if any)
o Any registra�on number or other iden�fying number assigned by any other law.
5. Clause 5: Status
o The status of the assessee (individual, HUF, company, firm, etc.).
6. Clause 6: Previous Year (P.Y.)
o The relevant previous year (financial year) for the tax audit.
7. Clause 7: Assessment Year (A.Y.)
o The relevant assessment year (the year following the previous year).
8. Clause 8: Nature of Business or Profession
o A descrip�on of the nature of business or profession carried out by the assessee.
9. Clause 9: Par�culars of Firm/AOPs/BOIs
o Details of partners/members such as name, address, shares, and remunera�on.
Part B – Informa�on and Audit Details
10. Clause 10: Books of Account Maintained
o A list of books of account maintained by the assessee and the address where these
books are kept.
11. Clause 11: Accoun�ng Method Employed
o The method of accoun�ng employed by the assessee (cash or mercan�le system).
12. Clause 12: Details of Changes in Method of Accoun�ng
o Any changes in the method of accoun�ng employed in the relevant previous year
compared to the earlier years.
13. Clause 13: Method of Valua�on of Closing Stock
o The method of valua�on of closing stock employed during the previous year.
14. Clause 14: Details of Change in Valua�on Method
o Any change in the method of valua�on of closing stock as compared to the preceding
year and its effect on the profit/loss.
15. Clause 15: Capital Assets Converted into Stock-in-Trade
o Details of capital assets converted into stock-in-trade, including the descrip�on, date
of conversion, and amount debited to the profit & loss account.
16. Clause 16: Amounts Not Credited to Profit & Loss Account
o Par�culars of amounts not credited to the profit and loss account, such as the nature
of income and the corresponding amount.
17. Clause 17: Personal Expenses Charged to Profit & Loss Account
o Details of personal expenses, if any, debited to the profit & loss account.
18. Clause 18: Deprecia�on
o Details of deprecia�on allowable as per the Income-tax Act, including any
adjustments or devia�ons from what is claimed.
19. Clause 19: Amount Admissible Under Sec�ons 33AB, 33ABA, etc.
o Amounts debited to the profit and loss account that are also admissible under
various sec�ons, including details and computa�ons.
20. Clause 20: Bonuses and Commission
o Amounts paid as bonus or commission to employees, along with their details and
whether they are taxable.
21. Clause 21: Interest on Borrowings
o Interest on any loan or borrowing that has been debited to the profit and loss
account.
22. Clause 22: Payments Made to Persons Specified Under Sec�on 40A(2)(b)
o Payments made to specified persons as per Sec�on 40A(2)(b), including details of
such persons, the amount paid, and the nature of the payment.
These clauses are meant to gather detailed informa�on about the financial transac�ons and
accoun�ng prac�ces of the assessee, ensuring compliance with the Income-tax Act and providing a
clear picture of the financial posi�on of the en�ty being audited.
