{"id":30313,"date":"2025-10-28T16:13:33","date_gmt":"2025-10-28T10:43:33","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=30313"},"modified":"2025-10-28T16:36:18","modified_gmt":"2025-10-28T11:06:18","slug":"icai-reporting-of-tds-payable-under-clause-26-of-tar","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/icai-reporting-of-tds-payable-under-clause-26-of-tar\/","title":{"rendered":"ICAI: Reporting of TDS Payable under Clause 26 of TAR"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d7c6d01fa41\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d7c6d01fa41\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/icai-reporting-of-tds-payable-under-clause-26-of-tar\/#Clarification_on_Reporting_of_TDS_Payable_under_Clause_26_of_the_Tax_Audit_Report\" title=\"Clarification on Reporting of TDS Payable under Clause 26 of the Tax Audit Report\">Clarification on Reporting of TDS Payable under Clause 26 of the Tax Audit Report<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/icai-reporting-of-tds-payable-under-clause-26-of-tar\/#Relevant_Context\" title=\"Relevant Context\">Relevant Context<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/icai-reporting-of-tds-payable-under-clause-26-of-tar\/#Clauses_Involving_TDS_Reporting\" title=\"Clauses Involving TDS Reporting\">Clauses Involving TDS Reporting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/icai-reporting-of-tds-payable-under-clause-26-of-tar\/#Key_Distinction_on_Clause_26_Section_43B_vs_TDS_Reporting\" title=\"Key Distinction on Clause 26 (Section 43B) vs. TDS Reporting\u00a0\">Key Distinction on Clause 26 (Section 43B) vs. TDS Reporting\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/icai-reporting-of-tds-payable-under-clause-26-of-tar\/#Earlier_Ambiguity_on_Reporting_of_TDS_Payable\" title=\"Earlier Ambiguity on Reporting of TDS Payable\">Earlier Ambiguity on Reporting of TDS Payable<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/icai-reporting-of-tds-payable-under-clause-26-of-tar\/#ICAI_Clarification_Summary_on_Reporting_of_TDS_Payable\" title=\"ICAI Clarification Summary on Reporting of TDS Payable\">ICAI Clarification Summary on Reporting of TDS Payable<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/icai-reporting-of-tds-payable-under-clause-26-of-tar\/#Recent_Amendment_Note_AY_2025%E2%80%9326\" title=\"Recent Amendment Note (AY 2025\u201326)\">Recent Amendment Note (AY 2025\u201326)<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 data-start=\"0\" data-end=\"89\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-30314\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/10\/TAR-.png\" alt=\"TAR\" width=\"836\" height=\"406\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/10\/TAR-.png 756w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/10\/TAR--300x146.png 300w\" sizes=\"(max-width: 836px) 100vw, 836px\" \/><\/h2>\n<h2 data-start=\"0\" data-end=\"89\"><span class=\"ez-toc-section\" id=\"Clarification_on_Reporting_of_TDS_Payable_under_Clause_26_of_the_Tax_Audit_Report\"><\/span><span style=\"color: #000080;\"><strong data-start=\"2\" data-end=\"87\">Clarification on Reporting of TDS Payable under Clause 26 of the Tax Audit Report<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p data-start=\"91\" data-end=\"271\">As per the Revised Guidance Note on Tax Audit (October 2025 edition) issued by the ICAI, it has now been clarified that TDS Payable is <em data-start=\"292\" data-end=\"306\">not required<\/em> to be reported under Clause 26 of Form 3CD of the Tax Audit Report.<\/p>\n<h3 data-start=\"383\" data-end=\"410\"><span class=\"ez-toc-section\" id=\"Relevant_Context\"><\/span><span style=\"color: #000080;\"><strong data-start=\"390\" data-end=\"410\">Relevant Context<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"413\" data-end=\"543\">Clause 26 of Form 3CD deals with the reporting of liabilities covered u\/s 43B of the Income Tax Act, 1961.\u00a0Section 43B allows deduction for certain expenses only on actual payment basis, such as Tax, duty, cess, or fee, Employer\u2019s contribution to PF, ESI, etc., Bonus or commission to employees, Interest payable to scheduled banks, Leave encashment, etc.<\/p>\n<h3 data-start=\"321\" data-end=\"363\"><span class=\"ez-toc-section\" id=\"Clauses_Involving_TDS_Reporting\"><\/span><span style=\"color: #000080;\"><strong data-start=\"328\" data-end=\"363\">Clauses Involving TDS Reporting<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"364\" data-end=\"480\">TDS-related compliance and reporting are already covered through the following specific clauses in Form 3CD:<\/p>\n<ul data-start=\"482\" data-end=\"1213\">\n<li data-start=\"482\" data-end=\"702\">\n<p data-start=\"485\" data-end=\"504\">Clause 34(a): Auditor reports whether the assessee is required to deduct or collect tax. Furnish details of TAN, relevant sections, nature of payments, total amounts, and taxes deducted or collected.<\/p>\n<\/li>\n<li data-start=\"704\" data-end=\"934\">\n<p data-start=\"707\" data-end=\"726\">Clause 34(c): Requires reporting of interest payable u\/s 201(1A) for non-deduction, short deduction, or delayed payment of TDS\/TCS. Details of interest payable and actually paid must be provided.<\/p>\n<\/li>\n<li data-start=\"936\" data-end=\"1213\">\n<p data-start=\"939\" data-end=\"958\">Clause 21(b): Covers disallowance u\/s 40(a)(ia) for expenses where TDS was not deducted or not deposited within due dates. No disallowance is reported if Form 26A certification is obtained from the payee confirming tax payment on such income.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"1220\" data-end=\"1290\"><span class=\"ez-toc-section\" id=\"Key_Distinction_on_Clause_26_Section_43B_vs_TDS_Reporting\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1227\" data-end=\"1290\">Key Distinction on <\/strong><strong data-start=\"1227\" data-end=\"1290\">Clause 26 (Section 43B) vs. TDS Reporting\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"_tableContainer_1rjym_1\">\n<div class=\"group _tableWrapper_1rjym_13 flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"1292\" data-end=\"2333\">\n<thead data-start=\"1292\" data-end=\"1377\">\n<tr data-start=\"1292\" data-end=\"1377\">\n<th data-start=\"1292\" data-end=\"1305\" data-col-size=\"sm\"><strong data-start=\"1294\" data-end=\"1304\">Aspect<\/strong><\/th>\n<th data-start=\"1305\" data-end=\"1335\" data-col-size=\"lg\"><strong data-start=\"1307\" data-end=\"1334\">Clause 26 (Section 43B)<\/strong><\/th>\n<th data-start=\"1335\" data-end=\"1377\" data-col-size=\"lg\"><strong data-start=\"1337\" data-end=\"1375\">TDS Reporting (Clauses 34 &amp; 21(b))<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"1466\" data-end=\"2333\">\n<tr data-start=\"1466\" data-end=\"1712\">\n<td data-start=\"1466\" data-end=\"1486\" data-col-size=\"sm\">Applicability<\/td>\n<td data-col-size=\"lg\" data-start=\"1486\" data-end=\"1604\">Covers statutory liabilities like taxes, duties, cess, employer\u2019s PF\/ESI, interest to banks\/financial institutions.<\/td>\n<td data-col-size=\"lg\" data-start=\"1604\" data-end=\"1712\">Covers deduction and deposit of TDS\/TCS on specified payments (salaries, rent, professional fees, etc.).<\/td>\n<\/tr>\n<tr data-start=\"1713\" data-end=\"1919\">\n<td data-start=\"1713\" data-end=\"1741\" data-col-size=\"sm\">Basis of Disallowance<\/td>\n<td data-col-size=\"lg\" data-start=\"1741\" data-end=\"1824\">Expense disallowed unless actually paid on or before the due date of ITR filing.<\/td>\n<td data-col-size=\"lg\" data-start=\"1824\" data-end=\"1919\">Expense disallowed (up to 30%) if TDS not deducted or not deposited within prescribed time.<\/td>\n<\/tr>\n<tr data-start=\"1920\" data-end=\"2097\">\n<td data-start=\"1920\" data-end=\"1940\" data-col-size=\"sm\">Primary Focus<\/td>\n<td data-col-size=\"lg\" data-start=\"1940\" data-end=\"2029\">Ensures deduction is allowed only on actual payment basis for specific statutory dues.<\/td>\n<td data-col-size=\"lg\" data-start=\"2029\" data-end=\"2097\">Ensures compliance with TDS\/TCS provisions under Chapter XVII-B.<\/td>\n<\/tr>\n<tr data-start=\"2098\" data-end=\"2333\">\n<td data-start=\"2098\" data-end=\"2129\" data-col-size=\"sm\">Treatment of TDS Payable<\/td>\n<td data-col-size=\"lg\" data-start=\"2129\" data-end=\"2223\">Not applicable \u2014 TDS payable is not an expense claimed in P&amp;L and hence not reportable.<\/td>\n<td data-col-size=\"lg\" data-start=\"2223\" data-end=\"2333\">Reportable under Clauses 34 &amp; 21(b) if non-deduction or delay leads to disallowance or interest liability.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h3 data-start=\"822\" data-end=\"850\"><span class=\"ez-toc-section\" id=\"Earlier_Ambiguity_on_Reporting_of_TDS_Payable\"><\/span><span style=\"color: #000080;\"><strong data-start=\"829\" data-end=\"850\">Earlier Ambiguity on Reporting of TDS Payable<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"851\" data-end=\"1047\">There was uncertainty on whether \u201cTDS payable\u201d (i.e., tax deducted but not yet deposited to the government) should be disclosed under Clause 26 since it represents a statutory liability.\u00a0However, Institute of Chartered Accountants of India has clarified that TDS payable is not an expense covered under Section 43B. it is merely a statutory obligation to deposit tax deducted, and not a sum claimed as deduction in the profit and loss account.<\/p>\n<h3 data-start=\"1296\" data-end=\"1333\"><span class=\"ez-toc-section\" id=\"ICAI_Clarification_Summary_on_Reporting_of_TDS_Payable\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1303\" data-end=\"1333\">ICAI Clarification Summary on Reporting of TDS Payable<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"2372\" data-end=\"2499\">TDS Payable is not required to be reported under Clause 26, as it does not represent an expense claimed as a deduction. It is merely a statutory obligation to deposit tax deducted on behalf of others. Hence, TDS Payable is a liability under Section 43B, and no disclosure is warranted in Clause 26.<\/p>\n<h3 data-start=\"2696\" data-end=\"2741\"><span class=\"ez-toc-section\" id=\"Recent_Amendment_Note_AY_2025%E2%80%9326\"><\/span><span style=\"color: #000080;\"><strong data-start=\"2703\" data-end=\"2741\">Recent Amendment Note (AY 2025\u201326)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"2742\" data-end=\"2979\">\n<li data-start=\"2742\" data-end=\"2902\">\n<p data-start=\"2744\" data-end=\"2902\">As per CBDT corrigendum, delayed payments to Micro and Small Enterprises u\/s 43B(h) are no longer reported under Clause 26. Such disallowances are now to be reported under Clause 22 of Form 3CD. Clause 26 reporting applies only to liabilities claimed as deductions in the P&amp;L account.<\/p>\n<\/li>\n<\/ul>\n<ul data-start=\"1334\" data-end=\"1678\">\n<li data-start=\"1440\" data-end=\"1604\">\n<p data-start=\"1442\" data-end=\"1485\">TDS Payable does not qualify since It is not debited to P&amp;L as an expense.\u00a0TDS Payable is excluded from Clause 26 reporting in the Tax Audit Report. All TDS-related disclosures continue to be made under Clauses 34(a), 34(c), and 21(b), as applicable.&amp; It represents an amount collected on behalf of the government. Hence, no reporting of outstanding TDS is required under Clause 26. Revised ICAI guidance ensures clear demarcation between Section 43B liabilities and TDS compliance obligations.<\/p>\n<\/li>\n<li data-start=\"1440\" data-end=\"1604\">\n<p data-start=\"1442\" data-end=\"1485\">Auditors are not required to report \u201cTDS Payable\u201d under Clause 26 of Form 3CD in the Tax Audit Report as per the Revised ICAI Guidance Note on Tax Audit (October 2025).<\/p>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Clarification on Reporting of TDS Payable under Clause 26 of the Tax Audit Report As per the Revised Guidance Note on Tax Audit (October 2025 edition) issued by the ICAI, it has now been clarified that TDS Payable is not required to be reported under Clause 26 of Form 3CD of the Tax Audit Report. &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10103],"tags":[10353],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/30313"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=30313"}],"version-history":[{"count":2,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/30313\/revisions"}],"predecessor-version":[{"id":30316,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/30313\/revisions\/30316"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=30313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=30313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=30313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}