Rule 27: Form 5 for preliminary expenses
Rule 27 requires the section 44(3) expenditure statement in Form No. 5 for each tax year and sets its recipient and deadline. The statement requirement should be planned alongside the return-filing timetable.
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Rule 27 - Form of statement to be furnished regarding certain preliminary expenses eligible for deduction under section 44
(1) The statement containing particulars of expenditure required to be furnished under section 44(3) shall be in Form No. 5 for each tax year.
(2) Form No. 5 shall be furnished to the Director General of Income-tax (Systems) or any person authorised by him, one month prior to the due date for furnishing the return of income as specified under section 263(1).
Rule breakdown
Identify the statement covered by the rule
The required statement contains the expenditure particulars referred to in section 44(3). Rule 27 specifies Form No. 5 for each tax year.
Identify the relevant expenditure and Act requirement first. A completed form is a procedural step; it does not by itself establish that every expenditure item qualifies for deduction.
Prepare the correct form for the relevant year
Use Form No. 5 and reconcile its expenditure particulars to the underlying records for the tax year. Keep invoices and the basis of the section 44 classification with the working file.
The words for each tax year should not be replaced with a one-time filing assumption. Review the statement requirement for every year in which it applies.
Calculate the earlier deadline
Form No. 5 must be furnished one month before the return-filing due date specified under section 263(1). The rule links to the applicable due date rather than giving one fixed date for every assessee.
Establish the correct return deadline and any relevant official extension before calculating the statement deadline. Filing with the return is not the same as filing one month before that deadline.
Check recipient and submission evidence
The statement is furnished to the Director General of Income-tax (Systems) or a person authorised by him. Use the prescribed operational channel available for the form and retain submission evidence.
Confirm the current official filing instructions and authorised submission channel before filing.
Keep statement and audit obligations distinct
The expenditure statement under this rule is distinct from the audit-report form specified by Rule 28 for its covered assessees. Check both provisions where the underlying facts require it.
A practical file can contain separate entries for the expense schedule, Form No. 5, its deadline, submission acknowledgment and any independently applicable audit report.
Key takeaways
Specified statement
Use Form No. 5 for the section 44(3) particulars.
Each tax year
Review the requirement annually rather than assuming one filing covers all years.
Earlier than the return
The deadline is one month before the applicable section 263(1) return due date.
Practical checklist
- Reconcile the expenditure particulars to the records.
- Calculate the deadline using the applicable return due date.
- Retain submission evidence and the year-specific working.
Avoid
- Do not assume the return due date is also the statement deadline.
- Do not confuse Form 5 with the separate audit-report form.
FAQs
Which form does Rule 27 prescribe?
Form No. 5, for the statement containing expenditure particulars required under section 44(3).
Can the statement simply be filed on the return due date?
The stated deadline is one month before the section 263(1) return-filing due date.
Who receives the statement?
The Director General of Income-tax (Systems) or a person authorised by him.
Glossary
- Form No. 5
- The expenditure statement form prescribed for section 44(3).
- Linked deadline
- A deadline calculated by reference to the applicable return-filing due date.