Form 3CD Clause-wise Tax Audit Checklist – AY 2026-27

Form 3CD Clause-wise Tax Audit Checklist – FY 2025-26

Form 3CD Clause-wise Tax Audit Checklist – AY 2026-27 (FY 2025-26)
What this workbook is built on, and how updates reach you.
Form basis	Form 3CD as amended by Income-tax (Eighth Amendment) Rules 2025 – Notification 23/2025 dated 28-03-2025, effective 1-4-2025. e-filing schema v2.2.
Changes carried	Clause 12 (44BBC added), clause 19 rows omitted, clause 21(a) settlement-expenditure row, clause 22 substituted (MSME 3-part), clause 26 restricted to 43B(a)-(g), clauses 28/29 omitted, clause 31 nature codes A-L, clause 36B inserted (buyback 2(22)(f)).
Applies to	Audits for AY 2026-27 (FY 2025-26) under the Income-tax Act 1961. This is the final year of Form 3CA/3CB/3CD – a new consolidated form applies from tax year 2026-27 under the Income-tax Act 2025.
References	Guidance Note on Tax Audit u/s 44AB (Revised 2025), ICAI – refer para-wise. This checklist redrafts requirements in plain English and is NOT a reproduction of the GN or the statutory form.
Version	v1.0 – July 2026. File: Form-3CD-Tax-Audit-Checklist-AY-2026-27-v1.xlsx
Updates	Subscribe on the download page – we email when a new version releases (law changes / utility schema updates).
Sheet protection	Sheets are protected to guard the formulas and structure; every input (yellow) cell is open for editing. Nothing you need is locked.
Disclaimer	Prepared by RJA for professional use as a working tool. Verify against the live e-filing utility and current law before filing. Not professional advice.

Form 3CD Clause-wise Tax Audit Checklist – AY 2026-27 (FY 2025-26) – Client Documents Request (PBC)

Form 3CD Clause-wise Tax Audit Checklist – AY 2026-27 (FY 2025-26) – Client Documents Request (PBC)
Send this list to the client on day one; tick as received.
#	Document	Relates to clause
1	Signed financial statements with schedules and notes	All
2	Trial balance and complete ledgers (soft copy)	All
3	Bank statements – all accounts, full year	16, 31
4	GST returns GSTR-1/3B all months + GSTR-9 draft, with books reconciliation	4, 27, 44
5	TDS returns 24Q/26Q/27EQ + challans + Justification reports	21(b), 34
6	Form 26AS and AIS/TIS downloads	16, 34
7	Fixed asset register with purchase invoices for additions and put-to-use evidence	18
8	Loan agreements, sanction letters, statements; loan/deposit register with party PANs	31
9	Supplier list with Udyam registration certificates + creditors ageing	22
10	PF/ESI challans + ECR month-wise	20(b)
11	Statutory dues challans – GST/PT/bonus/leave encashment (43B)	26
12	Cash book – scrutiny for Rs 10,000+ payments (40A(3))	21
13	Related-party list with PANs and transactions	23
14	Stock records / inventory valuation working	14, 35
15	Share buyback documents, contract notes, demat statement (if any buyback receipts)	36B
16	Previous year 3CD + financials + ITR + computation	8, 32, 40
17	Details of any settlement of legal proceedings / penalties paid	21(a)
18	Property sale/purchase deeds with stamp duty values (if any)	17

Form 3CD Clause-wise Tax Audit Checklist – AY 2026-27 (FY 2025-26) – Partner Review Traps

Form 3CD Clause-wise Tax Audit Checklist – AY 2026-27 (FY 2025-26) – Partner Review Traps
The misses that get caught in peer review – check each before signing.
Trap	What goes wrong
ICDS disclosures (13(f))	Writing Nil against ICDS DISCLOSURES. Disclosures are required even when there is no profit adjustment—policies, inventories, revenue recognition.
Journal-entry loans (31)	269SS/269T reporting missed for loans squared via journal entries—now explicitly coded (codes G/H). Report them.
MSME trader suppliers (22)	Dues to TRADERS registered on Udyam are outside 43B(h)/clause 22(iii) per the MSME Ministry OM—but interest u/s 23 can still need reporting where MSMED applies. Check activity type on each Udyam certificate.
Clause 44 test-check	No documentation of HOW the GST expense break-up was compiled. Keep a test-check memo – the GN permits reasonable test-check with documentation.
F and O turnover (8/12)	Using contract value instead of absolute profit+loss for turnover; missing the trader who crossed limits.
36B scope	Clause 36B covers only buybacks ON OR AFTER 1-10-2024 (2(22)(f) regime). Earlier buybacks do not enter.
20(b) grace myths	Employee PF/ESI deposited after the statutory due date is taxable even if before the ITR date—Checkmate (SC). Month-wise verification, not annual totals.
Put-to-use vs purchase (18)	Depreciation claimed from invoice date instead of put-to-use date; 180-day test on put-to-use.
43B vs 43B(h) split	43B(h) MSME amounts do NOT go in clause 26 – they belong in clause 22. The utility validates this since the 1-4-2025 change.
Cash ratio evidence (8)	Claiming the Rs 10 crore limit without a documented cash receipts/payments ratio working—keep the computation in the file; non-account-payee cheques count as cash.

Form 3CD Clause-wise Tax Audit Checklist – AY 2026-27 (FY 2025-26) – Master Checklist (clauses 1-44)

Form 3CD Clause-wise Tax Audit Checklist – AY 2026-27 (FY 2025-26) – Master Checklist (clauses 1-44)
Mark Applicable Y/N, assign, remark, and review. Orange clause numbers = changed from 1-4-2025.
Clause	Requirement (plain English—redrafted)	Documents to verify
1	Legal name of the assessee exactly as per PAN.	PAN card / e-filing profile
2	Address as communicated to the Department.	Latest ITR / PAN address, GST RC
3	PAN, and Aadhaar where allotted (individuals).	PAN, Aadhaar
4	Whether liable to GST/customs/excise etc – list every registration number (all GSTINs, state-wise).	GST RCs, IEC, other registrations
5	Status of the assessee (individual/HUF/firm/company etc).	Constitution documents
6	1 April 2025 to 31 March 2026 (or shorter where applicable).	–
7	2026-27.	–
8	Tick the exact limb under which the audit is conducted – (a) to (e). Cross-check with the applicability working.	Applicability working (tab 2)
8a	Whether the assessee has opted for 115BA / 115BAA / 115BAB / 115BAC / 115BAD – keep Form 10-IC/10-IE acknowledgements.	Regime option forms + acknowledgements
9(a)	For firms/AOPs: names of partners or members and profit-sharing ratios.	Deed, ROF records
9(b)	Any change in partners/members or their ratios since the last date of the preceding year.	Amended deed, retirement/admission deeds
10(a)	Sector and sub-sector code for every business/profession carried on.	Utility code list
10(b)	Any addition/discontinuation of a business line during the year.	Board minutes, GST amendments
11(a)	Whether books are prescribed u/s 44AA – list them.	–
11(b)	Books actually maintained + ADDRESS where kept (incl cloud/server location note).	Books list, server/cloud detail
11(c)	Books actually examined by the auditor.	–
12	Whether P&L includes profits assessable on presumptive basis (44AD/44ADA/44AE/44B/44BB/44BBA/44BBB/44BBC/Ch XII-G/First Schedule) – report section and amount.	Computation, segment P&L
13(a)-(c)	Method employed, any change from the preceding year, and effect on profit.	Accounting policy note
13(d)-(f)	Deviations from ICDS, profit adjustment ICDS-wise, and the required ICDS DISCLOSURES (commonly missed – fill the disclosure text, not just Nil).	ICDS working, disclosure drafts
14	Method of valuation of closing stock; deviation from s.145A (inclusive method) and its profit effect.	Stock summary, valuation working
15	Particulars of any capital asset converted into stock-in-trade (date, cost, FMV).	Conversion resolution, valuation
16	s.28 items, refunds/duty credits admitted as due, escalation claims, any other income, capital receipts – not credited to P&L.	Refund orders, claim files, bank scan
17	Transfers of land/building below stamp-duty value – 43CA/50C details with both values.	Sale deeds, SDV certificates
18	Block-wise depreciation: WDV, additions/deletions with dates and put-to-use, adjustments (incl exchange/subsidy), allowable depreciation.	FAR, invoices, put-to-use evidence
19	Deductions u/s 33AB/33ABA/35(1)/35(2AA)/35(2AB)/35ABA/35ABB/35AD/35CCA/35CCC/35CCD/35D/35DD/35DDA/35E – as debited vs admissible. (32AC/32AD/35AC/35CCB rows stand omitted from 1-4-2025.)	Approvals, certificates, computations
20(a)	Sums paid to employees as bonus/commission which would otherwise be dividend/profit share – 36(1)(ii).	Payroll, board minutes
20(b)	PF/ESI employee-share: amount, DUE DATE under the respective law and ACTUAL deposit date – month-wise (late = income u/s 2(24)(x); Checkmate SC).	Challans, ECR, annexure B
21(a)	Capital, personal, advertisement (political), club fees, penalty/fine for law violation, offence expenditure, and the NEW row – expenditure to settle proceedings for contravention under notified laws (from 1-4-2025).	Ledger scrutiny notes
21(b)	Interest/royalty/fees/salary etc inadmissible u/s 40(a) for TDS default – link with clause 34 recon.	TDS recon (annexure)
21(c)-(e)	40(b) excess partner remuneration/interest; 40A(3)/(3A) cash payments above Rs 10,000 (35,000 transporters); 40A(7) gratuity provision.	Deed, cash book scan
21(f)-(i)	40A(9) fund contributions, contingent liabilities debited, 14A disallowance (with working), 36(1)(iii) proviso interest for capital WIP.	14A working, loan utilisation
22	THREE parts: (i) interest inadmissible u/s 23 MSMED; (ii) TOTAL amount required to be paid u/s 15 during the year to micro/small suppliers; (iii) split – paid within the 15/45-day limit vs beyond (the 43B(h) disallowance bucket). Use the MSME annexure.	Udyam certificates, supplier ageing (annexure / MSME Excel)
23	Payments to specified/related persons—name, PAN, relation, nature, amount.	Related-party schedule
24	Deemed profits u/s 32AC/32AD/33AB/33ABA/33AC (withdrawals/violations).	Scheme records
25	Remission/cessation of trading liability, recovery of allowed deductions—with computation.	Creditor write-back ledger
26	Statutory dues analysis: pre-existing liability paid/unpaid + current-year liability paid by 139(1) date vs not – GST, PF employer, bonus, interest to banks/FIs, leave salary etc. (43B(h) is NOT here – it sits in clause 22.)	Challans, returns, annexure A
27	ITC availed/utilized and treatment in accounts; prior-period income/expenditure credited/debited.	GST returns, prior-period ledger
28-29	Clauses 28 and 29 (56(2)(viia)/(viib)) stand OMITTED w.e.f. 1-4-2025 – the utility no longer asks for them.	–
29A	Advance received on capital-asset negotiation and forfeited – 56(2)(ix).	Agreements, forfeiture letters
29B	Money/property received without or for inadequate consideration – 56(2)(x).	Valuation reports
30	Amounts borrowed/repaid on hundi otherwise than by account-payee cheque.	–
30A	Primary TP adjustment triggering secondary adjustment—excess money, imputed interest.	TP order/return
30B	EBITDA-based interest limitation for borrowings from non-resident AEs above Rs 1 crore.	Loan agreements, EBITDA working
30C	Impermissible avoidance arrangements – report where applicable (rarely invoked; document the management representation).	MRL
31	Loans/deposits/specified sums taken or repaid above limits – now with NATURE-OF-AMOUNT CODES A to L from the dropdown (cash, non-account-payee cheque, asset transfer, journal entry, other). Journal-entry settlements are reportable – the classic trap.	Loan register (annexure), confirmations
32	Brought-forward loss/depreciation table with return-filing dates; s.79 shareholding-change check for companies; speculation loss 73/73A; deemed speculation Explanation to 73.	Loss schedule, shareholding registers
33	Section-wise deductions claimed with quantum – verify certificates (80-IA/80G/80JJAA etc need forms).	Deduction certificates, Form 10CCB etc
34(a)	Full table: section, nature, total payment, amount liable, TDS made, deposited – reconcile with books and returns (annexure).	26Q/24Q/27EQ, challans, TDS recon
34(b)	Whether all TDS/TCS statements filed in time; if not, list – AND whether they contain all reportable transactions.	Filing acknowledgements
34(c)	Interest liability for late deduction/deposit—amount and payment status.	Interest computations, challans
35	Trading: opening/purchases/sales/closing. Manufacturing: raw material + finished goods with yield/shortage.	Stock records
36A	Loans/advances from closely held companies to substantial shareholders—amount and date received.	Shareholding + loan ledgers
36B	Amount received on buyback of shares u/s 2(22)(f) (buybacks on/after 1-10-2024) – amount received AND cost of acquisition of those shares.	Buyback documents, contract notes, demat statement
37	Whether a cost audit was carried out—attach observations on disqualification/disagreement only.	Cost audit report
38	Central excise audit, if any—same reporting pattern.	Audit report
39	Special audit on valuation of taxable services, if directed.	Audit report
40	Turnover, GP/turnover, NP/turnover, stock-in-trade/turnover, material consumed/finished goods—CURRENT + PRECEDING year (auto-computes in the annexure).	Annexure (auto)
41	Demands raised or refunds issued during the year under any other tax law with proceeding details.	Orders, portal downloads
42	Whether required to furnish—furnished-in-time details with unreported-transaction note.	SFT acknowledgements
43	Whether parent/alternate reporting entity—report furnishing details.	CbCR filings
44	Total expenditure split: GST-registered suppliers (exempt-supply / composition / other registered) vs unregistered – document the test-check basis in remarks; keep working papers.	Expense GST analysis (test-check memo)

In summary, 

• The Form 3CD Clause-wise Tax Audit Checklist for AY 2026-27 (FY 2025-26) is a practical compliance and audit tool aligned with the Income-tax (Eighth Amendment) Rules, 2025, and the latest e-filing schema v2.2, incorporating all key amendments effective from 1 April 2025.
• It covers major changes, including the introduction of Clause 12 for Section 44BBC (Cruise Ship Presumptive Taxation), revised MSME reporting under Clause 22, modified Section 43B reporting under Clause 26, new Clause 36B for buy-back transactions under Section 2(22)(f), amended Clause 31 reporting for loans and deposits, and the omission of Clauses 28 and 29.
• The checklist guides tax auditors through clause-wise verification, client document requirements, audit evidence, review checkpoints, and common compliance pitfalls, with special focus on Section 43B(h) MSME disallowances, PF/ESI due-date compliance, ICDS disclosures, journal-entry loans under Sections 269SS/269T, and buy-back reporting, helping auditors enhance documentation, minimize reporting risks, and ensure accurate and compliant Form 3CD reporting for AY 2026-27.

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