Form 34 Income Tax Rules 2026 pdf download and Key points

Last Updated on: April 25, 2026

Form 34 Income Tax Rules 2026 pdf download and Key points

FORM NO. 34
[See rule 68]
Report for deduction in respect of additional employee cost under section 146 of the Act

Under the Income-tax Rules, 2026, Form No. 34 replaces the erstwhile Form 10DA. It is governed by Section 146 of the Income-tax Act, 2025 (which replaces the old Section 80JJAA) and Rule 68 of the Income-tax Rules, 2026.

Here are all the key points regarding Form No. 34:

1. Purpose of the Form Form 34 is a statutory report used to certify and claim a deduction for additional employee costs incurred by a business or profession. Under Section 146, eligible taxpayers can claim a deduction equal to 30% of the additional employee cost incurred during the tax year, and this deduction is allowed for three consecutive tax years beginning from the year employment is provided.

2. Applicability (Who Should File) The form must be filed by an assessee earning income from a business or profession who is liable to get their accounts audited (under Section 63/44AB) and is claiming the deduction under Section 146.

Payment Condition: To be eligible, the emoluments paid to these additional employees must be made via an account payee cheque, an account payee bank draft, an electronic clearing system through a bank account, or other specified electronic modes.

3. Meaning of “Additional Employee” and Eligible “Emoluments”

Additional Employee: This refers to an employee hired during the tax year whose employment actually increases the total number of employees compared to the headcount on the last day of the immediately preceding tax year.
Excluded Emoluments: The eligible cost strictly excludes any contributions paid or payable by the employer to any pension or provident fund, as well as any lump-sum payments made at the time of the employee’s termination.

4. Frequency and Due Date Form 34 must be filed along with the statutory Audit Report under Section 63 of the Income-tax Act, 2025. Therefore, the exact due date to file this form aligns with the taxpayer’s due date for filing their tax audit report.

5. Verification Requirement The form cannot be self-certified by the taxpayer alone; it must be formally verified and e-verified using the Digital Signature Certificate (DSC) of a Chartered Accountant.

6. Structure and Contents of the Form The form is designed to systematically calculate the eligible deduction and requires the following details:

Basic Information: Name, PAN, Tax Year, and Nature of Business.
Employee Details: The number of employees on the last day of the preceding tax year, the number of employees added during the current tax year, and the exact number of eligible additional employees whose emoluments qualify for the deduction.
Emolument Details: The amount paid to the additional employees during the current tax year and the immediately preceding tax year.
Deduction Details: The final computed amount eligible for deduction in the current tax year and the preceding two tax years.

7. Key Updates in the 2026 Rules

Pre-filled Data: To streamline compliance, basic details like the Assessee’s Name, PAN, and Tax Year are now pre-filled with an option to edit.
Terminology: Obsolete terms such as “Assessment year”, “Financial year”, or “Previous year” have been universally replaced with “Tax year”.

1. What is Form 34?
Ans. Form 34 is required to be filed along with the Return of Income by audited assessees availing deduction u/s 146 on additional employee cost incurred. Form 34 is to be filed under Rule 68 of the Income tax Rules. The form should be verified by a Chartered Accountant. The deduction that can be availed under this section is 30% of additional employee cost incurred, for 3 tax years.
2. Who should file Form 34?
Ans. An assessee earning income from business or profession and liable to be audited u/s 44AB, availing deduction u/s 146 on additional employee cost should file this form. The payment to said employees should be made via an account payee cheque/bank draft or by use of electronic clearing system through a bank account or via electronic mode as specified in Rule 6ABBA.
3. What is the Due Date to file Form 34?
Ans. Form 34 is required to be filed along with the Audit report u/s 63 of the Income-tax Act, 2025. Hence, the due date for filing audit report will be the due date to file this form.
4. Who is an additional employee, the emoluments of whom are eligible for deduction?
Ans. An additional employee is an employee who is employed during the tax year and whose employment increases the total number of employees employed as on the last day of the preceding tax year. However, under the following conditions, the employee will not be
treated as an additional employee for claim of deduction:
– If the total emoluments of the employee exceed Rs. 25000 per month.
– If the Government pays the entire contribution under the Employees’ Pension Scheme.
– If the employee does not participate in a Recognised Provident Fund.
– If the employee is employed for less than 150 days during the tax year where the assessee is engaged in the business of apparel, footwear or leather manufacturing.
– If the employee is employed for less than 250 days during the tax year in the case of other assessees.
However, if the employees are employed for the said number of days (150 or 200) in the immediately succeeding tax year for the respective business, they shall be deemed as additional employees for that tax year.
5. What do emoluments to additional employees include?
Ans. Emoluments mean any sum paid or payable to an employee for his employment. However, it does not include employer contributions paid or payable to any pension or provident fund or any other fund and lump sum payments paid or payable to an employee at the time of termination of his service.
6. What is the deduction allowed on additional employee cost?
Ans. A deduction of an amount equal to 30% of additional employee cost incurred in the course of business in the tax year shall be allowed for three consecutive tax years, beginning from the tax year in which the employment is provided.
7. Why is Form 34 important?
Ans. The deduction on emoluments paid to additional employees u/s 146 is allowed based on details filed in Form 34.

Form 34 Income Tax Rules 2026 pdf download and Key points

Form 34 Income Tax Rules 2026 pdf download and Key points

Form 34 Income Tax Rules 2026 pdf download

Form No.34– Frequently Asked Questions

Guidance Note on Form 34