Form 101 Income Tax Rules 2026 pdf download and Key points
FORM NO. 101
[See rule 171(2)]
Inventory Valuation report under section 268(5)
Under the new Income-tax Rules, 2026, Form No. 101 replaces the old Form 6D. It is governed by Section 268(5)(ii) of the Income-tax Act, 2025, and Rule 171 of the Income-tax Rules, 2026.
Here are all the key points regarding Form No. 101:
1. Purpose of the Form Form 101 is an Inventory Valuation Report furnished by a Cost Accountant. It is filed as per directions received from the Assessing Officer (AO) (with prior approval of higher authorities) to ensure the accurate valuation of inventories for tax computation and verification purposes, in line with the Act and the applicable Income Computation and Disclosure Standards (ICDS).
2. Applicability (Who Should File)
- Who files: It must be furnished by every assessee who has been specifically directed by the AO to get their inventory valued under section 268(5)(ii).
- Verification: The valuation must be conducted and certified by a Cost Accountant nominated by the competent authority, who will provide a true and fair statement of the inventory valuation after examining the assessee’s books, records, and documents.
3. Frequency and Due Dates
- Non-Recurring Nature: Form 101 is not a regular periodic filing. It is filed only for the tax year in which the Department directs a special valuation of inventory.
- Time Limit: The report must be submitted to the AO within the period specified by the AO. Even if extended, the total time allowed cannot exceed six months from the end of the month in which the direction was received by the assessee.
4. Structure of the Form The form is divided into the main certification and annexures:
- Certification by the Cost Accountant: Contains details of the examination of books and documents, the valuation of opening and closing inventories, compliance with Income-tax provisions, and the observations/comments of the Cost Accountant.
- Part A (Personal Information): Captures the assessee’s identification details, such as Name, PAN, address, contact particulars, and the relevant tax year.
- Part B (Inventory Valuation Report): Provides comprehensive quantitative details, disclosures on insurance claims, discrepancies, ICDS compliance, and the effect of valuation changes on profit and tax computation. It also includes specialized schedules for Construction Contracts, Securities held as stock-in-trade, and specific inventories like livestock, agricultural/forest produce, mineral oils, ores, and gases.
5. Required Documents The Cost Accountant and assessee will require the following documents to prepare and file Form 101:
- Books of account and records relating to the purchase, consumption, and sale of inventory items.
- Financial statements and stock registers.
- Details of cost sheets, valuation workings, and inventory management system data.
- Supporting evidence such as physical verification reports, insurance valuations, or price lists.
6. Process Flow
- The AO directs the assessee to get the inventory valued by a Cost Accountant.
- The Cost Accountant examines the records and conducts site visits if necessary.
- The detailed Inventory Valuation Report and Annexures are prepared, verified, and submitted before the AO.
7. Outcome of Filing
- For the Assessee: Ensures legal compliance with the AO’s direction under Section 268(5)(ii) and provides a validated inventory valuation that may impact income computation.
- For the Department: Enables independent verification by qualified professionals, ensures a uniform reporting format for comparison, and facilitates fair and transparent assessment proceedings.
8. Key Updates in the 2026 Rules
- Terminology: The term “Assessment Year” has been universally replaced with “Tax Year“.
- Alignment: All sections, clauses, and schedules have been updated to align with the new Income-tax Act, 2025.
- Standardization: The form now uses a simplified and standardized tabular reporting format, and the currency symbol “Rs.” has been replaced with “₹”.