The Government has released Draft Form No. 66, introducing a structured reporting framework for the computation of book profit under Section 206(1) of the Income-tax Act, 2025. The proposed form lays down detailed disclosure requirements, transition adjustments, and certification norms for companies liable to tax on book profits.
The draft format signals a move toward greater transparency and uniformity in calculating book profit, particularly for companies following Indian Accounting Standards (Ind AS) and those undergoing accounting convergence adjustments.
What Is Draft Form 66?
Form 66 is a certification and reporting format to be filed by companies for the computation of book profit under Section 206(1). The report must be certified by a Practicing Chartered Accountant under the Institute of Chartered Accountants of India framework and in accordance with the Chartered Accountants Act, 1949.
The form is divided into multiple parts covering:
- General company details
- Profit as per financial statements
- Adjustments under Section 206
- Transition amount calculations
- Book profit computation
- Tax payable
- Mandatory CA certification
Structure of Draft Form 66
Part A - General Information
Companies must disclose:
- Name, PAN, address and contact details
- Relevant tax year
- Total income under the Act
- Income-tax payable
- Financial year adopted under the Companies Act, 2013
The form also requires confirmation that the statement of profit and loss has been prepared in accordance with Schedule III of the Companies Act, 2013.
Part B - Adjustments to Book Profit
This section requires detailed additions and deductions under Section 206(1)(c) and 206(1)(d). Companies must:
- Add specified items such as certain reserves, provisions, or adjustments
- Deduct eligible items as prescribed
- Provide working notes wherever required
The structure resembles a Minimum Alternate Tax (MAT)-style computation mechanism, ensuring book profits are aligned with statutory adjustments.
Part C - Transition Amount & Ind AS Adjustments
One of the most significant aspects of Draft Form 66 is the reporting of “Transition Amount” under Section 206(1)(t).
Companies transitioning to Indian Accounting Standards (Ind AS) must disclose:
- Adjustments made to Other Equity
- Capital reserve and securities premium adjustments
- Revaluation surplus changes
- Fair value adjustments under Ind AS 109
- Adjustments relating to PPE and intangible assets under Ind AS 101
- Cumulative translation differences
The form requires the computation of 1/5th of the transition amount, indicating phased adjustment over multiple years.
This provision ensures tax neutrality during accounting convergence.
Special Category: IFSC Units
Companies located in an International Financial Services Centre (IFSC) deriving income solely in convertible foreign exchange must disclose their status separately for rate applicability.
Mandatory Chartered Accountant Certification
Form 66 must be certified by a Chartered Accountant holding a valid Certificate of Practice. The CA must confirm:
- Examination of accounts and records
- Correct computation of book profit
- Tax payable under Section 206(1)
- Accuracy of disclosures
Membership number, firm registration number and UDIN details are mandatory.
Why Draft Form 66 Matters
The introduction of Draft Form 66:
- Standardizes book profit computation
- Enhances reporting transparency
- Brings clarity to Ind AS transition adjustments
- Strengthens audit accountability
- Reduces ambiguity in Section 206 tax calculations
For companies, especially large corporates and Ind AS-compliant entities, this draft framework signals tighter compliance oversight and structured documentation requirements.
What Companies Should Do Now
- Review accounting policies and reconciliation statements
- Evaluate transition adjustments already claimed
- Prepare detailed working papers for Section 206 adjustments
- Coordinate with statutory auditors and tax advisors
- Monitor final notification and implementation timeline
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