Rule 66: Form 32 audit for eligible-business deductions
Rule 66 prescribes audit reporting for deductions under sections 46 and 138–144. It requires Form No. 32, separate undertaking or enterprise reporting and the relevant section-specific documents.
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Bare law
Rule 66 - Furnishing of audit report for claiming deduction under section 46 or 138 or 139 or 140 or 141 or 142 or 143 or 144
(1) For the purposes of claiming deduction under sections 46 or 138 or 139 or 140 or 141 or 142 or 143 or 144, the accounts of the eligible business for the tax year for which the deduction is claimed shall be audited by an accountant as defined in section 515(3)(b), before the specified date referred to in section 63 and the assessee shall furnish by that date the report of such audit duly signed and verified by such accountant.
(2) The report of the audit of the accounts of an assessee, which is required to be furnished under sub-rule (1), shall be in Form No. 32.
(3) A separate report shall be furnished by each undertaking or enterprise of the assessee claiming deduction under section 46 or 138 or 139 or 140 or 141 or 142 or 143 or 144 and shall be accompanied by the profit and loss account and balance sheet of the undertaking or enterprise as if the undertaking or the enterprise were a distinct entity.
(4) The said Form No. 32 shall be accompanied by the relevant documents as given in column D wherever applicable, as per the relevant sections in column B and the relevant part as mentioned in column C shall be filled, as specified in the following table, duly certified wherever applicable:
Sl. No Section Relevant Part of Form Relevant documents to be attached 1. 46 B1 Copy of the agreement entered into with the Central Government, State Government, or a local authority. 2. 138 B2 Copy of Form No. 10CCB of the Income-tax Rules, 1962 made under the Income-tax Act, 1961, as it existed prior to its repeal, of developer 3. 139 B3 Copy of the notification of the Special Economic Zone (SEZ). 4. 140 B4 Copy of certificate issued by the Inter-Ministerial Board of Certification. 5. 141 B5 Copy of approval certificate and completion certificate of the Housing Project, Copy of the notification of the scheme by the Board. 6. 142 B6 Copy of approval certificate and completion certificate of the Housing Project 7. 142 B6 Copy of notification issued under section 80-IBA of the Income-tax Act, 1961, as it existed prior to its repeal in the case of a Rental Housing Project 8. 143 B7 Copy of the agreement entered into with the Central Government, State Government, or a local authority.
Rule breakdown
Confirm the deduction and eligible business
The rule names sections 46, 138, 139, 140, 141, 142, 143 and 144. Identify the provision and the undertaking or enterprise actually claiming the deduction.
The audit report supports the claim; it does not replace the substantive conditions in the relevant deduction section.
Complete the audit and furnishing by the specified date
The eligible-business accounts must be audited by the defined accountant before the specified date referred to in section 63. The signed and verified report must be furnished by that date.
Calendar the audit and furnishing requirements from the applicable current statutory date. Do not assume the return-filing date is necessarily the same deadline.
Use Form 32 and separate undertaking accounts
A separate report is required for each undertaking or enterprise claiming the listed deduction. It must be accompanied by that undertaking’s profit-and-loss account and balance sheet as if it were a distinct entity.
Where a taxpayer has several units, reconcile their separate accounts with the overall books and identify the correct report for each unit.
Match the form part and attachment to the section
The table maps the stated sections to Form 32 parts B1–B7 and documents such as government agreements, the SEZ notification, Inter-Ministerial Board certification, housing-project approvals or completion certificates and the stated older-law documents.
Use the actual relevant row and attach the applicable documents, certified where required. The introductory requirement also names section 144 even though the attachment table does not contain a separate row for it; do not invent an additional table row.
Practical reporting file
Keep the deduction eligibility analysis, separate financial statements, audit working, relevant approvals and notifications, signed Form 32 and acknowledgment together.
Check that the section, unit, period and figures agree across the report, attachments and return. An approval for another entity or project should not be assumed to support the claim.
Key takeaways
Form 32
The listed deductions use the prescribed audit report.
Separate unit reporting
Each undertaking or enterprise requires its report and distinct financial statements.
Section-specific attachments
Match the table row and applicable supporting documents.
Specified-date deadline
Complete and furnish within the linked section 63 timing.
Practical checklist
- Identify the relevant section and unit.
- Prepare distinct unit accounts and reports.
- Attach the applicable certified documents and retain acknowledgment.
Avoid
- Do not assume the general return deadline is the audit-report deadline.
- Do not use another project’s approval as evidence for the unit.
FAQs
Can one undifferentiated report cover every undertaking?
Sub-rule (3) requires a separate report for each undertaking or enterprise claiming the listed deduction.
Are attachments the same for every deduction section?
No. The table maps different sections and form parts to relevant documents.
Does Form 32 alone establish deduction eligibility?
No. The substantive parent-section conditions must also be met.
Glossary
- Form 32
- The audit report prescribed by Rule 66.
- Separate undertaking report
- The unit-level report and accounts required by sub-rule (3).
- Specified date
- The linked section 63 date used by Rule 66.