Form 3CD Clause 26 Section 43B Working Paper Format 2026
FORM 3CD CLAUSE 26 — SECTION 43B WORKING PAPER
Assessee: {{client_name}} · PAN: {{client_pan}} · Previous year ended: {{period_end}} · Assessment Year: 2026-27
What the clause asks: for any sum referred to in section 43B, (A) where the liability pre-existed on the first day of the previous year but was not allowable in an earlier year — the amount (a) paid during the previous year and (b) not paid during the previous year; and (B) where the liability was incurred in the previous year — for clauses of section 43B other than clause (h) — the amount (a) paid on or before the due date for furnishing the return under section 139(1) and (b) not paid on or before that date. The clause also asks whether sales tax, goods and services tax, customs duty, excise duty or any other indirect tax, levy, cess or impost is passed through the profit and loss account.
1. Part A — liabilities brought forward from earlier years
| Section 43B clause | Nature of liability | Year in which incurred and disallowed | Opening amount disallowed ₹ | (a) Paid during the year ₹ | Date(s) of payment | (b) Not paid during the year ₹ | Evidence ref. |
|---|
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| (h) | Dues to micro and small enterprises disallowed last year | | | | | | |
| Total | | | | | | |
Start from clause 26(B)(b) and clause 22 of last year’s Form 3CD, and from the disallowance actually made in last year’s return and any assessment. Amounts in column (a) are deductible this year on payment. Earlier-year section 43B(h) amounts paid this year belong here, because Part A is no longer limited to clauses (a) to (g).
2. Part B — liabilities incurred during the year (clauses other than (h))
| Section 43B clause | Nature of liability | Amount incurred in the year ₹ | Paid during the year ₹ | Paid after year-end up to the section 139(1) due date ₹ | Date and challan / reference | (a) Total paid on or before due date ₹ | (b) Not paid on or before due date ₹ |
|---|
| (a) | Tax, duty, cess or fee under any law (GST, customs, professional tax, municipal taxes, etc.) | | | | | | |
| (b) | Employer’s contribution to provident, superannuation, gratuity or other employee-welfare fund | | | | | | |
| (c) | Bonus or commission to employees | | | | | | |
| (d) | Interest on loans or borrowings from public financial institutions and State financial or industrial investment corporations | | | | | | |
| (da) | Interest on loans or borrowings from specified non-banking financial companies | | | | | | |
| (e) | Interest on loans and advances from scheduled banks and co-operative banks | | | | | | |
| (f) | Leave encashment | | | | | | |
| (g) | Sums payable to the Indian Railways for use of railway assets | | | | | | |
| Total | | | | | | |
- The due date is the date applicable to this assessee under section 139(1), including any extension notified by the CBDT for the assessment year. Record the date used: ____________.
- Position on the date of signing: where the report is signed before the return due date, column (b) shows what is unpaid on the signing date. Say so in the clause, and tell the client that later payments before the due date must be reflected in the return.
- Interest converted into a loan, a fresh borrowing or a debenture is not treated as actually paid. Trace "payments" of interest to the bank statement, not to a journal entry or a restructuring letter.
- Report a liability under this clause whether or not it has been debited to the profit and loss account, for example indirect taxes carried in balance-sheet accounts.
- Employees’ contributions to provident fund and ESI are not section 43B items. They fall under section 36(1)(va), are tested against the due date under the fund’s own law, and are reported in clause 20(b).
- Current-year dues to micro and small enterprises under section 43B(h) are reported in clause 22, not in Part B.
3. Indirect taxes passed through the profit and loss account
| Tax / levy | Accounting method (inclusive / exclusive) | Passed through P&L? (Y/N) | Amount in P&L ₹ | Remarks |
|---|
| Goods and services tax | | | | |
| Customs duty | | | | |
| Other indirect tax, levy, cess or impost: ____________ | | | | |
4. Evidence to obtain
- Year-end schedule of statutory dues, with ledger balances for each tax, duty, cess and fee.
- Challans and returns after year-end: GST electronic cash and liability ledgers and GSTR-3B for March, professional-tax and provident-fund challans, municipal tax receipts.
- Bonus, commission and leave-encashment provision workings, and payroll and bank evidence of payment.
- Loan statements and sanction or restructuring letters from banks, financial institutions and NBFCs showing interest accrued, due and actually paid.
- Last year’s Form 3CD (clauses 22 and 26), computation of income and any assessment order, to establish the opening disallowed balances.
5. Common errors
- Reporting GST payable as paid because it was set off against input tax credit in a later month without checking the date the return was actually filed.
- Missing year-end provisions that sit outside the statutory-dues ledgers — bonus, commission and leave encashment — because no "payable" account was scanned.
- Treating a bank’s capitalisation of interest as payment.
- Reporting employees’ provident-fund contributions here instead of clause 20(b), and applying the return due date to them.
- Leaving Part A blank when last year’s report showed unpaid amounts.
- Repeating current-year section 43B(h) amounts in Part B.
6. Flow to the return of income
Part B(b) is the amount disallowed under section 43B for the year, entered clause-wise in the Other Information schedule of the return and added back in the business-income schedule. Part A(a) is entered in the same schedule as an amount disallowed in an earlier year and allowable this year on payment. The portal compares both against the return; update the figures in the return for payments made between signing and filing, and keep the challans.
Conclusion: amount allowable this year on payment of earlier-year liabilities — ₹ ____________; amount not paid on or before the due date and disallowable for the year — ₹ ____________. Due date applied: ____________. Date of signing: ____________.
Prepared by: {{prepared_by}} Reviewed by: Date: 1 October 2026
