Form 35 Income Tax Rules 2026 pdf download and Key points
FORM NO. 35
[See rule 69]
Report for deduction in respect of income of Offshore Banking Units and Units of International Financial Services Centre under section 147(4)(a) of the Act
Under the Income-tax Rules, 2026, Form No. 35 replaces the erstwhile Form 10CCF. It is governed by Section 147(4)(a) of the Income-tax Act, 2025 (which replaces the old Section 80LA(3)) and Rule 69 of the Income-tax Rules, 2026 (replacing the old Rule 19AE).
Here are all the key points regarding Form No. 35:
1. Purpose of the Form Form 35 is a statutory report of an accountant that is required to be filed by assessees availing tax deductions under Section 147 on income derived from an Offshore Banking Unit located in a Special Economic Zone (SEZ) or from a Unit of an International Financial Services Centre (IFSC).
2. Applicability (Who Should File) The form must be filed by an assessee that is a scheduled or foreign bank having an Offshore Banking Unit in an SEZ, or a Unit of an International Financial Services Centre, and is seeking to claim a deduction on its income.
3. Due Date Form 35 is required to be filed along with the Return of Income. Therefore, the exact due date to file this form aligns with the assessee’s respective due date for furnishing their annual income tax return.
4. Structure of the Form The form is structured to capture essential operational and financial details:
- Basic details: Captures the Name, Address, PAN, and the relevant Tax Year.
- Details of the unit claiming deduction: Captures the unit’s Name, Address, the exact nature of the unit (whether an Offshore Banking Unit in an SEZ or an IFSC Unit), and requires the upload of the official permission obtained.
- Details of the deduction: Captures the first year of the deduction claim, gross income, income not received in convertible foreign exchange, expenses, and net income.
5. Mandatory Documents and Information Required To successfully file Form 35, the following information and documents are required:
- Details of the specific unit claiming the deduction.
- A copy of the permission(s) obtained under section 23(1)(a) of the Banking Regulation Act, 1949, or the International Financial Services Centres Authority Act, 2019 (50 of 2019).
- Details of any previous claims of deduction.
- The income (specifically net of income not received in convertible foreign exchange) and expenses of the unit for the tax year of the deduction claim.
6. Filing Process and Verification
- Process Flow: The assessee must enter the details of the unit, upload the required permission copies, and enter the income, expense, and deduction computations online.
- Accountant Verification: The form cannot be self-certified. After the details are entered, the form must be verified and e-verified using the Digital Signature Certificate (DSC) of a Chartered Accountant.
7. Outcome and Importance Filing this form is critical because the tax deduction on the income from Offshore Banking Units or IFSC Units is permitted based on the details successfully filed and processed in Form 35. All monetary amounts in the form must be filled in Indian Rupees (₹) unless explicitly stated otherwise.
8. Key Updates in the 2026 Rules
- Pre-filled Data: To streamline the compliance process, basic details such as the Assessee’s Name, PAN, and Tax Year are now pre-filled, though the assessee retains the option to edit them if necessary.
- Terminology: Obsolete terms such as “Assessment year”, “Financial year”, or “Previous year” have been universally replaced with “Tax year” across the form and its annexures.