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India implemented Country-by-Country reporting regulations to monitor international transactions and specific domestic transactions closely. All entities are obligated to provide transaction reports using Form 3CEAA, as per the rules outlined in Section 92D of the Income Tax Act. This article explains the provisions concerning Form 3CEAA, its applicability, due date, purpose, and requirements.
The Master File, also known as Form 3CEAA under the Income Tax Act, is a comprehensive record of an entity's international and specified domestic transactions. The government made it compulsory to maintain the Master File in 2017 to ensure transparency and compliance.
Under Section 92D of the Income Tax Act, any individual or entity engaged in international or specified domestic transactions must provide Form 3CEAA as per the rules of the Income Tax Act.
Form 3CEAA consists of 2 parts - Part A and Part B
Both the parts are explained in detail below -
This part comprises basic information about the relevant international group involved in the transfer pricing activity. It consists of details like the name of the international group, entities involved in that group, their address, and PAN details.
Every entity entering an international transaction must file Part A of Form 3CEAA. This is important as it helps the Indian government maintain a record of such transactions.
Part B of Form 3CEAA applies only to some people. This part requires you to furnish the details of the international group and all the transactions undertaken.
Entities meeting the following conditions are required to file Part B of Form 3CEAA -
The due date for filing Form 3CEAA is the same as the due date for filing your income tax return under section 139(1). Therefore, the due date for filing 3CEAA depends on the due date applicable for filing ITR.
Every time an entity enters into a specified domestic transaction or an international transaction, the Government of India expects it to maintain a record of that transaction. This helps them check the Base Erosion and Profit Shifting. As per the requirements of section 92D, entities are required to maintain a country-by-country record of the transactions entered into and a Master File in Form 3CEAA.
Both parts of Form 3CEAA require you to furnish different information. Below are the details of the requirements of Form 3CEAA -
Part A is relevant for individuals who meet the eligibility criteria under section 92D. It covers all the basic information that is required for keeping a record of the transactions entered into. Any individual filing Form 3CEAA has to fill in the following details -
Every individual or entity that enters into an international transaction or a specified domestic transaction with an international group is required to file Form 3CEAA. Part A of this Form has to be filed only by a person who has entered into any such transaction as mentioned above. Whereas Part B of this Form is applicable to those who fulfill any of the below-mentioned conditions -
So, if you have entered into an international transaction or a specified financial transaction in the previous financial year, you must furnish Form 3CEAA by the ITR filing due date. If you are still unsure if you are required to file Form 3CEAA or not, you can consider seeking professional help. Contact our tax experts and get all your tax-related queries answered. Get Tax Consultation Now!
Either of the following conditions must be met for Part B of the form:
Form No. 3CEA, a report prepared by a Chartered Accountant (CA), must be submitted in the event of a slump sale under section 50B. This form is to be filed electronically, requiring a Digital Signature Certificate (DSC). It must be submitted along with the income tax return, and the deadline for filing aligns with the due date specified under section 139(1) of the Income Tax Act for the assessee's income tax return.
The report in Form 3CEAA must be provided by the due date for submitting the income tax return as outlined in section 139(1). It should include the following information:
This form comprises two parts. Part A is applicable to any individual or entity meeting the requirements, while Part B is specifically designated for those who meet either of the following conditions:
The consolidated group revenue for the preceding accounting year exceeds Rs. 500 crore.
A slump sale involves the transfer of either a portion or the entirety of a business to another entity in exchange for a lump sum payment. In this type of transaction, the buyer acquires ownership of various assets, liabilities, intellectual property, contracts, employees, and debtors from the seller.
If the information requested by the prescribed authority to verify the accuracy of the Country-by-Country (CbC) report is not provided within the stipulated time mentioned in the notice, the reporting entity will face a penalty of Rs 5,000 per day after the specified period expires.
