Rule 68: Form 34 additional employee cost report
Rule 68 prescribes Form No. 34 for the accountant’s report under section 146(3)(c), which supports the additional-employee-cost deduction. The current parent Act’s furnishing deadline must be checked alongside the notified rule’s wording.
Official notified Income-tax Rules, 2026Need advice on Rule 68?
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Bare law
Rule 68 - Furnishing of report under section 146
Report of an accountant as defined in section 515(3)(b), which is required to be furnished by the assessee under section 146(3)(c) along with the return of income shall be in Form No. 34.
Rule breakdown
Confirm the section 146 claim
The parent section governs the additional-employee-cost deduction, including the eligible employees, expenditure and business conditions. Rule 68 identifies the report form.
Prepare the eligibility and payroll reconciliation before asking the accountant to certify the claim.
Obtain the prescribed Form 34
The report must be from an accountant within section 515(3)(b)’s definition and in Form No. 34. Use the current official form for the relevant year.
Keep payroll, employment and payment evidence sufficient to support the actual statutory claim rather than relying solely on the number of new employees.
Follow the current parent-Act deadline
The notified Rule 68 text refers to furnishing along with the return. Current section 146(3)(c), however, requires the accountant’s report before the specified date referred to in section 63. Schedule the report to meet that current statutory requirement rather than waiting merely for the return-filing date.
Confirm the applicable specified date and current official filing process, and retain the report and acknowledgment.
Reconcile the report with the deduction computation
Match the qualifying employee-cost working, accounts, report and return. Document exclusions and relevant employee-level conditions under section 146.
A filed Form 34 does not itself establish that every employee or payroll payment qualifies.
Key takeaways
Form 34
The prescribed accountant report for section 146(3)(c).
Current Act timing
Meet the section 63 specified-date requirement in current section 146.
Payroll eligibility matters
The parent deduction conditions still require evidence.
Practical checklist
- Prepare employee-level eligibility and cost workings.
- Obtain the defined accountant’s Form 34.
- Meet the current statutory report deadline.
Avoid
- Do not equate all payroll growth with qualifying additional employee cost.
- Do not ignore the parent Act’s earlier specified-date requirement.
FAQs
Which form is prescribed for this report?
Form No. 34.
Can the report simply wait until the return is filed?
Check current section 146(3)(c), which requires furnishing before the section 63 specified date; the rule’s older along-with-return wording should not be used to postpone that statutory deadline.
Does hiring an employee automatically qualify the cost?
No. The employee, payment and business conditions under section 146 must be checked.
Glossary
- Form 34
- The accountant report prescribed by Rule 68.
- Additional employee cost
- The cost category defined and governed by section 146, rather than every payroll payment.