CBDT notifies new I-T Rule 6ABBB on “Form of statement to be furnished regarding preliminary expenses incurred under section 35D” which prescribes e-filing of the statement in Form 3AF one month before the ITR due date specified under section 139(1), using DSC or EVC, vide Notification 54/2023 – Income-tax (Fourteenth Amendment) Rules, 2023.
CBDT Income Tax Notification 54/2023 dated 01/08/2023: CBDT notifies new I-T Rule 6ABBB, prescribes Statement in Form 3AF for Amortisation of External Preliminary Expenditure u/s 35D
It may be noted that new I-T Rule 6ABBB has been inserted in line with amendment in Section 35D carried by clause 12 of the Finance Act, 2023 to relax the restriction of using external services from CBDT-approved concerns for aortisation of preliminary expenses. subject to submission of statement in Form 3AF by the assessee within the prescribed deadline.
This new I-T rule 6ABBB outlines the requirements for providing information about preliminary expenses incurred under section 35D of the Income Tax Act and essentially explains the process and requirements for reporting expenses related to such activities using the specified form 3AF.
Prior to amendment in Section 35D, preliminary activities were required to be performed by the assessee inhouse or by an CBDT approved external company, which posed numerous challenges to the successful implementation of new projects. To simplify the process of claiming amortisation for these preliminary expenses, Finance Act 2023 has amended section 35D of the Income Tax Act to remove the requirement of incurring expense on conducting such activities through CBDT approved companies, as part of the measures to ease compliance. The assessee will now only be required to provide a statement containing the specifics of this expenditure in the prescribed form 3AF in the prescribed manner.
Further, Form 3AE has been amended/substituted and new Form 3AF has been inserted.
These amendments are applicable from April 1, 2024 and will apply to assessment years 2024-25 and onwards.
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