Tax audit report

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Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2016 Hello Experts..!

While filling form 3CD, is it required to disclose the loan exceeding Rs.20000 taken or repaid by cheque during the year

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 September 2016 No disclosure required if it is through cheque.

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2016 Sir, then what to mention in column "maximum amount outstanding during the year"??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 September 2016 Say it as NIL......................

Querist : Anonymous

Querist : Anonymous (Querist)

07 September 2016 sir, if details of loan taken by cheque are not required to be disclosed , then why in the 8th column it is required to mention that "Whether the loan/ deposit was taken or accepted otherwise than by an account payee bank cheque or account bank draft"

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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26 July 2025 Excellent and very practical question — you're referring to **Clause 31(a), (b), (c)** of **Form 3CD** of the **Tax Audit Report**, which deals with reporting of **loans or deposits of ₹20,000 or more** under **Sections 269SS and 269T**.

Let’s clarify your doubts point by point.

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## 🔍 Clause 31(a), (b), (c) – What It Requires:

You need to **report**:

* **Loans or deposits** **accepted** or **repaid** **during the year** **where the amount is ₹20,000 or more**, and
* **Specify** whether such loan or deposit was accepted or repaid:

* **Otherwise than** by **account payee cheque/account payee bank draft or electronic modes**.

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### ✅ 1. **Do you need to disclose loans taken/repaid by account payee cheque (or electronic mode)?**

**Yes**, you still need to **disclose** the transaction, but you will mention that it was **not in violation** of Section 269SS/269T.

✅ Disclosure is **mandatory** **even if**:

* The transaction was through proper banking channel (account payee cheque/draft/ECS/RTGS/etc.)
* There was **no violation** of 269SS or 269T

You will mention **mode of payment** and answer **"No"** to the column:

> "Whether taken or accepted otherwise than by account payee cheque or account payee bank draft?"

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### ✅ 2. **Why is column 8 asking whether it was in a mode other than cheque?**

Because the intent of **Clause 31** is to help the department **identify violations** of Sections 269SS and 269T — which prohibit **cash transactions** of ₹20,000 or more **for loans, deposits, or specified advances**.

So, for every such loan/deposit accepted or repaid ≥ ₹20,000, you must disclose:

* Name, PAN of the lender/borrower
* Whether amount is squared up
* **Maximum amount outstanding during the year**
* Mode of transaction (to determine if there was any **cash**)

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## 🧾 ✅ Example:

### Scenario:

* Mr. A accepted ₹1,00,000 loan from Mr. B **by account payee cheque**.
* The loan was repaid in 3 instalments of ₹20,000 each by **bank transfer**.

### Reporting in Form 3CD, Clause 31(a)/(b)/(c):

| **Name of Lender/Depositor** | **PAN** | **Max Outstanding** | **Mode** | **Violation?** |
| ---------------------------- | ------- | ------------------- | ------------- | -------------- |
| Mr. B | \[PAN] | ₹1,00,000 | Cheque / Bank | **No** |

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### ❌ Do Not Say "NIL" if loan exists

Even if there is **no violation**, if a loan/deposit **≥ ₹20,000** was taken or repaid during the year, **you must disclose it** and fill in **maximum outstanding amount** during the year.

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## ✅ Summary:

| Question | Answer |
| ------------------------------------------------------------- | ---------------------------------------------------------------------------------- |
| Do we report loans ≥ ₹20,000 if taken by cheque? | ✅ **Yes** |
| Do we say NIL in "Maximum Amount Outstanding" if loan exists? | ❌ **No**, report actual max balance |
| What is clause 8 (mode of payment) asking? | Whether any part of loan/deposit was taken/repaid **in violation** of Sec. 269SS/T |

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Let me know if you'd like a sample filled-out table for Clause 31 for reference.

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