Form 3CD Clause 43 for AY 2026-27: CbCR, Section 286 & Form 3CEAD

Direct answer: For AY 2026-27, Clause 43 of Form 3CD asks whether the assessee, its parent entity or an alternate reporting entity was required to furnish the Country-by-Country Report under section 286(2) of the Income-tax Act, 1961 and, where applicable, the key reporting particulars. This is a tax-audit disclosure point for multinational groups; it is not the same as merely filing Form 3CEB or the Master File.

1. Why Clause 43 matters for AY 2026-27

Clause 43 sits at the intersection of tax audit and transfer pricing. It is relevant where the tax-audit client belongs to an international group that falls within India’s Country-by-Country Reporting (CbCR) regime. For FY 2025-26 / AY 2026-27, the tax audit continues under the Income-tax Act, 1961 and Form 3CD. The auditor therefore needs to test the section 286 reporting position even though the Income Tax Act, 2025 has separately introduced a new reporting architecture for tax years beginning 1 April 2026.

The practical risk is simple: a finance team may complete Form 3CEB and transfer-pricing documentation correctly but overlook the separate group-level CbCR obligation. Clause 43 forces that question into the tax-audit file.

2. What Clause 43 of Form 3CD requires

Clause 43 requires the tax auditor to identify whether the assessee or its parent entity or alternate reporting entity is liable to furnish the report referred to in section 286(2). Where the reporting requirement applies, the audit file should capture the identity of the reporting entity and the filing position of the relevant CbCR.

ICAI guidance describes Clause 43 as the disclosure relating to the report under section 286(2), including whether the report has been furnished, the name of the parent entity, the alternate reporting entity where relevant, and the date of furnishing.

3. Section 286 and Form 3CEAD: the AY 2026-27 framework

Under the 1961 Act framework, section 286 created India’s Country-by-Country Reporting regime for qualifying international groups. Rule 10DB prescribes the mechanics and Form 3CEAD is the CbCR form used by a parent entity, alternate reporting entity or other qualifying constituent entity resident in India.

The Income Tax Department’s current statutory-forms page continues to identify Form 3CEAD as the report furnished for purposes of section 286(2) or section 286(4). It also identifies Form 3CEAC as the intimation by an Indian constituent entity of an international group whose parent is not resident in India.

For the old-law section 286 framework relevant to AY 2026-27, Rule 10DB historically prescribes a consolidated group revenue threshold of ₹5,500 crore for CbCR applicability. The threshold must be tested at international-group level rather than merely against the Indian entity’s standalone turnover.

4. Clause 43 is different from Form 3CEB and the Master File

These three compliance layers should not be mixed up:

• Form 3CEB is the accountant’s report under section 92E for international transactions and specified domestic transactions.

• Master File compliance under section 92D and Rule 10DA is a separate group-information requirement, generally involving Forms 3CEAA and 3CEAB.

• CbCR under section 286 and Rule 10DB is a group-level jurisdictional reporting regime, principally using Forms 3CEAC, 3CEAD and 3CEAE.

A taxpayer may therefore have one obligation, more than one obligation, or none, depending on its facts. The existence of Form 3CEB does not by itself prove that CbCR applies.

5. What should the tax auditor verify?

A robust Clause 43 working paper should begin with the legal structure of the international group and the identity of its ultimate parent entity. The auditor should then determine whether the group meets the applicable consolidated-revenue threshold and identify which entity is responsible for CbCR filing.

The following evidence is usually high value:

• group organisation chart and list of constituent entities;

• audited consolidated financial statements of the ultimate parent;

• documentation of the reporting accounting year;

• Form 3CEAC acknowledgement, where an Indian constituent entity has a non-resident parent;

• Form 3CEAD acknowledgement where India is the reporting jurisdiction;

• Form 3CEAE or group designation records, where applicable; and

• written confirmation of the parent or alternate reporting entity and its jurisdiction.

6. Practical example

Assume IndiaCo is part of a multinational group with a foreign ultimate parent. IndiaCo is subject to tax audit for AY 2026-27 and has international transactions reported in Form 3CEB. The group’s consolidated revenue for the relevant accounting year exceeds the Rule 10DB threshold.

IndiaCo’s tax-audit team should not stop after reconciling Form 3CEB. It should establish whether the CbCR is being filed by the foreign parent or an alternate reporting entity in a jurisdiction having the required exchange arrangement with India, whether IndiaCo’s Form 3CEAC obligation was met, and whether any Indian filing obligation arises under section 286(4). Clause 43 should then be completed based on that verified reporting chain.

7. Common Clause 43 mistakes

The most common control failures are treating Form 3CEB as proof of CbCR compliance, testing the threshold using only the Indian company’s turnover, failing to identify the ultimate parent or alternate reporting entity, and relying on a group email without retaining filing acknowledgements.

Another recurring issue is timing. Section 286 reporting can operate on a different reporting-accounting-year timeline from the Indian tax-audit calendar. The Clause 43 file should therefore distinguish between applicability, filing responsibility and whether the statutory due date has actually arrived.

8. 2026 transition: old Act Clause 43 vs new Act CbCR

Professionals should keep the transition clean. AY 2026-27 relates to FY 2025-26 and continues to use the 1961 Act tax-audit forms, including Form 3CD and Clause 43. For tax years under the Income Tax Act, 2025, the Department has introduced a new CbCR framework with new form numbering. Current official material identifies Form 59 as the Country-by-Country Report under the new law and refers to a ₹6,400 crore consolidated-group-revenue threshold.

That new-law threshold should not be mechanically imported into an AY 2026-27 Clause 43 working paper. The tax-audit team should apply the law and forms relevant to the year being audited.

9. Clause 43 pre-filing checklist

Before signing Form 3CD, consider the following eight checks:

1. Confirm whether the assessee is a constituent entity of an international group.

2. Identify the ultimate parent entity and its tax jurisdiction.

3. Obtain the relevant consolidated group revenue and test the applicable CbCR threshold.

4. Determine the reporting entity: parent, alternate reporting entity or Indian constituent entity.

5. Verify whether Form 3CEAC, 3CEAD or 3CEAE applies to the facts.

6. Retain acknowledgements and group reporting confirmations.

7. Reconcile the reporting accounting year with the tax-audit year.

8. Ensure the Clause 43 disclosure agrees with the transfer-pricing and Master File compliance file.

10. Frequently asked questions

Is Clause 43 applicable to every company with foreign transactions?

No. Foreign or related-party transactions may trigger transfer-pricing reporting, but Clause 43 is tied specifically to the Country-by-Country Reporting regime for qualifying international groups.

Does filing Form 3CEB satisfy Clause 43?

No. Form 3CEB and CbCR are separate reporting obligations. The Clause 43 analysis must independently test section 286 and Rule 10DB.

Which form is the CbCR under the 1961 Act?

Form 3CEAD is the CbCR form under Rule 10DB for the relevant reporting entities. Form 3CEAC is an intimation form for certain Indian constituent entities with non-resident parents.

What if the CbCR due date is after the tax audit?

The auditor should distinguish the existence of the reporting obligation from whether the filing deadline has occurred and document the position. Clause 43 should be supported by the applicable timeline and group reporting responsibility.

11. Related PGT & Associates guides

Form 3CEB for AY 2026-27: https://www.pgtandassociates.com/post/form-3ceb-ay-2026-27-applicability-due-date-penalty

Transfer Pricing Documentation under Rule 10D: https://www.pgtandassociates.com/post/transfer-pricing-documentation-rule-10d

Form 3CD Clause 42 — SFT Reporting: https://www.pgtandassociates.com/post/form-3cd-clause-42-sft

12. Primary references

Income Tax Department — statutory forms: https://www.incometax.gov.in/iec/foportal/help/all-topics/statutory-forms/all-forms

Income Tax Department — Transfer Pricing guidance: https://www.incometaxindia.gov.in/en/transfer-pricing

ICAI — Guidance Note / tax-audit reference material on Form 3CD Clause 43.

Professional takeaway

Clause 43 is a small field in Form 3CD but a high-risk group-compliance checkpoint. For multinational groups, the strongest audit file is one that links the legal threshold, group structure, reporting entity, CbCR acknowledgements and Form 3CD disclosure into one documented chain.

PGT & Associates assists businesses and multinational groups with tax-audit reconciliations, transfer-pricing documentation and international-tax compliance. For a fact-specific review, use the enquiry/contact section on pgtandassociates.com.

Disclaimer: This article is for general professional information and does not constitute legal or tax advice. Applicability depends on the specific facts, group structure, reporting jurisdiction and law in force for the relevant year.