Form 27 Income Tax Rules 2026 pdf download and Key points
Form 27 Income Tax Rules 2026 pdf download and Key points
FORM NO. 27
[See rule 50]
Details of amount attributed to capital asset remaining with the specified entity
Under the Income-tax Rules, 2026, Form No. 27 is prescribed under Rule 50. It is governed by Section 67(10) and Section 72(5) of the Income-tax Act, 2025.
Here are all the key points regarding Form No. 27:
1. Purpose of the Form Form 27 operationalises the method prescribed under Rule 50 for the attribution of income taxable under Section 67(10) (which corresponds to Section 45(4) of the old 1961 Act). It serves as the statutory basis for computing the amount attributed to the capital assets that continue to remain with a specified entity after its dissolution or reconstitution, thereby allowing for the relevant tax deductions under Section 72(5) (formerly Section 48(iii)).
2. Applicability (Who Should File) The form must be filed by every specified entity from which a specified person receives any capital asset or stock-in-trade (or both) during the tax year, in connection with the dissolution or reconstitution of that specified entity (as per section 8 of the Income-tax Act, 2025).
3. Is Filing Mandatory? Yes, furnishing Form 27 is strictly mandatory in cases where income becomes taxable under Section 67(10) and the attribution of such income to the remaining capital assets is required under Rule 50.
4. Frequency and Due Dates
- Frequency: The form is event-specific. It must be filed for each tax year in which a dissolution or reconstitution event occurs that gives rise to taxation under Section 67(10).
- When to File: It must be furnished to the Assessing Officer along with the return of income of the specified entity for the relevant tax year. Specifically, it must be filed on or before the due date specified in Section 263(1)(c) for the tax year in which the amount is chargeable to tax.
5. Mode of Filing and Verification
- Electronic Filing: Form 27 must be furnished electronically; offline filing is not permitted.
- Authentication: It must be authenticated electronically using either a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC).
- Signatory: The form must be verified and certified by the principal officer or authorised person of the specified entity who is legally authorised to verify the return of income under Section 265.
6. Structure and Contents of the Form The form systematically captures the details of the retained assets and their valuation:
- Entity Details: Name, Address, Permanent Account Number (PAN), and the relevant Tax/Assessment Year.
- Taxable Amounts: The total aggregate amount taxable under Section 67(10).
- Asset-wise Attribution: Detailed attribution of the taxable amount to the capital assets remaining with the entity. The form allows reporting of multiple capital assets, capturing their book value, revalued amount (or valued amount for self-generated assets), and classifying them as short-term or long-term assets.
- Valuer Details: The Name and Registration Number of the valuer whose report forms the basis of the computation.
7. Mandatory Valuation Report The attribution under Rule 50 must be based on a formal valuation or revaluation report of the capital assets (including self-generated assets or goodwill) issued by a registered valuer as defined under Rule 56(F). A copy of this valuation report must be mandatorily uploaded along with Form 27.
8. Consequences of Non-Compliance or Errors
- No Automatic Revisions: Revision of Form 27 may not be permitted unless specifically enabled by the electronic filing system, meaning the specified entity must ensure correctness before submission.
- Impact of Non-Filing: Non-filing or incorrect filing of the form may lead to disputes in the computation of capital gains, the denial of deductions under Section 72(5), and the potential initiation of penal proceedings under the Income-tax Act.
1. What is Form No. 27?
Form No. 27 is a form prescribed under Rule 50 of the Income-tax Rules to be furnished by a specified entity for reporting the amount attributed to capital assets remaining with the specified entity, in cases where income is taxable under section 67(10) of the Income-tax Act, 2025 (corresponding to section 45(4) of the Income-tax Act, 1961).
2. What is the objective of Form No. 27?
The objective of Form No. 27 is to operationalise the method prescribed under Rule 50 for attribution of income taxable under section 67(10) to the capital assets that continue to remain with the specified entity after dissolution or reconstitution.
3. Who is required to file Form No. 27?
Form No. 27 is required to be filed by every specified entity from which a specified person receives, during the tax year, any capital asset or stock-in-trade or both, in connection with the dissolution or reconstitution of such specified entity.
4. Is Form No. 27 mandatory?
Yes. Furnishing Form No. 27 is mandatory where income becomes taxable under section 67(10) and attribution of such income to capital assets remaining with the specified entity is required under Rule 50.
5. When should Form No. 27 be filed?
Form No. 27 must be furnished along with the return of income of the specified entity for the tax year in which the specified person receives the capital asset or stock-in-trade or both upon dissolution or reconstitution.
6. How many times is Form No. 27 required to be filed?
Form No. 27 is event-specific and is required to be filed for each tax year in which a dissolution or reconstitution event occurs giving rise to taxation under section 67(10).
7. What information is required to be furnished in Form No. 27?
The form requires details of the specified entity, tax year, amount taxable under section 67(10), asset-wise attribution of such amount, book value and revalued value of assets, classification of assets as short-term or long-term, details of the registered valuer, and upload of valuation report.
8. Is valuation of capital assets mandatory?
Yes. Attribution under Rule 50 must be based on a valuation report issued by a registered valuer, and a copy of such report is required to be uploaded.
9. Who is required to verify and sign Form No. 27?
Form No. 27 must be verified and signed by the authorised person or principal officer of the specified entity.
10. Can Form No. 27 report more than one capital asset?
Yes. The form allows reporting of multiple capital assets with asset-wise attribution and reporting of the aggregate total.
11. Can Form No. 27 be filed offline?
No. Form No. 27 is required to be furnished electronically.
12. Is revision of Form No. 27 permitted?
Revision may not be permitted unless specifically enabled by the electronic filing system. Care should therefore be taken to ensure correctness before filing.
13. What are the consequences of non-filing or incorrect filing of Form No. 27?
Non-filing or incorrect filing may lead to disputes in computation of capital gains, denial of deductions under section 72(5), and initiation of proceedings under the Income-tax Act.
14. Why is Form No. 27 important?
Form No. 27 ensures correct implementation of Rule 50, provides transparency in valuation-based attribution, and reduces litigation in cases of dissolution and
reconstitution.
Form 27 Income Tax Rules 2026 pdf download
Form No.27– Frequently Asked Questions
Guidance Note on Form 27
Form 20 Income Tax Rules 2026 pdf download and Key points
Form 21 Income Tax Rules 2026 pdf download and Key points
Form 22 Income Tax Rules 2026 pdf download and Key points
Form 23 Income Tax Rules 2026 pdf download and Key points
Form 24 Income Tax Rules 2026 pdf download and Key points
Form 25 Income Tax Rules 2026 pdf download and Key points
Form 26 Income Tax Rules 2026 pdf download and Key points
for more refer income tax website click here
for more refer YouTube Subscribe website click here
Pingback: TaxHeal - GST and Income Tax Complete Guide Portal