New Single Income Tax Form to Replace Forms 3CA, 3CB, and 3CD: Know Complete Details here

Starting from the tax years commencing on or after April 1, 2026, the traditional audit forms (3CA, 3CB, and 3CD) will be replaced by a single, integrated document Form No. 26. This is governed by Section 63 of the IncomeTax Act, 2025 and Rule 47.

Structure of the New Audit Report

The new Form No. 26 is designed to reduce the compliance burden. The authorities have made following parts to the Form:

Part A & B: These sections contain the Statement of Particulars (formerly Form 3CD).

Part C: This is the specific Audit Report for assessees whose accounts are audited under any other law (formerly Form 3CA).

Part D: This report is for assessees whose accounts are not audited under any other law (formerly Form 3CB)

Who is Required to Furnish Form No. 26?

The form is required to be furnished by a person carrying on business or profession whose accounts are required to be audited under Section 63 of the Income-tax Act, 2025. This includes:

(a) Business - where total sales, turnover or gross receipts exceed ₹1 crore (threshold increases to ₹10 crore where cash receipts and cash payments each do not exceed 5% of total receipts and payments respectively);

(b) Profession cases where gross receipts exceed ₹50 lakh;

(c) Presumptive taxation cases under sections 58(2) or 61(2) (Table: Sl. Nos. 4 and 5) where income declared is lower than the deemed income.

(d) Presumptive Taxation cases: When a taxpayer opts out of a presumptive scheme in any of the five consecutive years (the "lock-in period"), and their income exceeds the basic exemption limit.

Due Date: Form No. 26 is required to be furnished within the time prescribed under the Act, generally one month prior to the due date prescribed under Sec􏰀on 263(1), unless extended by the Board.

Documents to be filed in the Form No. 26

1. Books of account and relevant financial statements of the assessee (Balance Sheet, Profit & Loss Account / Income & Expenditure Account and Notes to Accounts).
2. Audit report and audited financial statements, where the accounts are audited under any other law.
3. Supporting documents and workings for par􏰀culars and disclosures required under Part A & B of Form No. 26.
4. TDS/TCS and indirect tax (GST) records, returns, challans and reconcilia􏰀ons, as applicable.
5. Quantitative and inventory records for trading, manufacturing, raw materials, finished goods, by-products and scrap, wherever applicable.

Common Changes Made Across Forms:

As per the department’s instructions, the following common changes have been made:

1. Fields such as Name, Designation, Address, PAN, have been separated into individual boxes to address earlier grouping issues.
2. References to Assessment/Financial/Previous Year(s) have been updated to “Tax Year(s)”
3. Sections, Clauses, and Schedules have been revised in accordance with the provisions of the Income-tax Act, 2025.
4. The currency symbol “Rs.” has been replaced with “₹”.
5. Uniform adoption of Yes / No response format across the form.
6. Mandatory schedule-based reporting wherever the response is “Yes”
7. Increased use of tabular and structured disclosures instead of narrative reporting
8. Separate identification of items chargeable to tax but not credited/debited to the profit and loss account
9. Consolidation of repetitive disclosures into common schedules referenced throughout the form
10. Standardisation of language, formats and response patterns across all parts of the form

Process of Filing Form 26

The filing process of Form No. 26 begins with the assessee engaging an Accountant as defined under Section 515(3)(b) of the Income-tax Act, 2025. The Accountant is responsible for filling the form on the e-filing portal, duly mentioning the Membership Number and Firm Registration Number (FRN), wherever applicable.

Subsequently, a Unique Document Identification Number (UDIN) (mandatory) is generated and quoted in the form. The completed form is then digitally signed using the Accountant’s Digital Signature Certificate (DSC) and uploaded on the portal. Finally, the assessee electronically accepts Form No. 26, thereby completing the filing process.

Mandatory Technological Disclosures

In the past, taxpayers were not required to disclose the specific accounting software they used. Under the new rules, this disclosure is mandatory for data authenticity. With regards to cloud storage, taxpayers have to disclose the IP & country for traceability. It also required to disclose backup server, automation and cross-matching

Disclosure of GST/any other Duty/ Taxes

As per the rules, the assessee should furnish the indirect taxes such as GST, excise duty or customs duty. The details of total expenditure now no longer need be reconciled with the various entries of expenditure under GST reporting.

Rationalisation of Depreciation Reporting - Clause 36

Clause 18 of the former Form 3CD is equivalent to Clause 36. A material change has been made to explicit segregation between assets used for less than 180 days and 180 days or more without requirement of specific dates. This would lead to substantial reduction in compliance burden.

Changes in Auditor Certification (Part C &D)

Under Form No. 26, the manner auditors report their observations and qualifications in Parts C and D of the audit report has been changed. Any audit observations or qualifications must now be mandatorily classified clause-wise into three specific categories, namely, those based on

1. test-check (applying the principle of materiality),
2. those based on management representation, and
3. those where the auditor is unable to verify the information.

“This will help the Department in analysing the audit observations/qualifications in an automated/standardized way, and will help in deciding the remedial course of action, including selecting the cases for further scrutiny” says the department.

Alignment b/w the ITR and Form No. 26

To allow the taxpayer or department to enter the information from Form No. 26 into the ITR in the future, efforts have been taken to coordinate the data required in Form No. 26 with that in the ITR Form.

Additionally, there would be fewer discrepancies between the ITR and Form No. 26, which might lead to adjustments under section 270(1). As a result, there would be fewer rectifications, appeals, grievances, etc.

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