Clause 33 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Clause 33 reports section-wise deductions admissible under Chapter VI-A or Chapter III — the Chapter III part being limited to sections 10A and 10AA — measured against the books audited under section 44AB.
From the ICAI Guidance Note on Tax Audit (Revised 2026), the concluding edition under the Income-tax Act, 1961. For tax years under the Income-tax Act, 2025 the deduction provisions must be identified afresh, and the particulars move to Form No. 26 under rule 47 of the Income-tax Rules, 2026.
What clause 33 covers
Paragraph 65.1: Chapter VI-A deals with deductions allowed from gross total income, categorised as A — deductions in respect of certain payments, B — deductions in respect of certain incomes, and C — other deductions. Chapter III relates to income which does not form part of total income, but reporting at clause 33 is required only with respect to exemptions under section 10A (newly established undertakings in free trade zones) and section 10AA (newly established units in Special Economic Zones).
And a standing oddity the Guidance Note records: deduction under section 10A is not available from A.Y. 2012-13, even though it is still a requirement under this clause.
The section 80AC timing problem
Paragraph 65.1: section 80AC states that no deduction under Chapter VI-A heading "C — Deductions in respect of certain incomes" shall be allowed unless the return of income is furnished on or before the due date prescribed under section 139(1).
But the tax audit report is signed one month before that due date. The Guidance Note's resolution:
"In view of due date for filing of return of income u/s 139(1) being after submission of tax audit report, tax auditor may put remark about admissibility of claim of deduction under Part C of Chapter VIA or section 10A/10AA that it will be subject to furnishing of return of income by assessee within specified time u/s 139(1) of the Act."
Clause 33 is one of the few particulars whose admissibility cannot be finally determined at the date of signing, because the condition is satisfied later. The Guidance Note's answer is not to omit the deduction or to assert it unconditionally, but to report the amount with a remark making it subject to timely filing. The same structural problem appears at clause 43, where Form 3CEAC is not yet due when the report is signed.
Which books the amounts come from
Paragraph 65.2 sets the boundary. The tax audit report relates to the business or professional activity of which the auditor is doing the audit under section 44AB, and Form No. 3CD gives particulars relating to that business or profession. Therefore the clause 33 answer must be framed with reference to the items appearing in the books of account audited by the tax auditor.
| Situation | Approach |
|---|---|
| Report for a specific branch or unit | Examine the deduction particulars with reference to that branch or unit's books, with appropriate remarks towards exclusion of data relating to the head office and other branches or units |
| Report for the head office | Take into consideration the tax audit reports of branches and other units audited by other tax auditors, complying with SA 600, Using the Work of Another Auditor, and consider the deduction particulars given by those auditors together with the head office books |
| Sole proprietor — individual or HUF with other activities and sources not subject to tax audit | Give the particulars with reference to the books of the business or profession subject to audit under section 44AB |
Paragraph 65.3 draws the consequence: the claim of deduction under Chapter VI-A in the return under section 139(1) may vary from the amount reported in Form 3CD, because of additional claims that are not part of the audited books of account. A difference between the report and the return is therefore expected, not an error.
Testing admissibility
Paragraph 65.4: admissibility depends on the various conditions laid down in the section under which the deduction or exemption is claimed. The auditor has to ascertain whether those conditions stand fulfilled, and obtain all necessary evidence enabling him to express an opinion on admissibility — checking all documentary evidence where a condition qualifies the amount.
Where the amount claimed by the assessee differs from the amount computed by the auditor:
- it is quite possible that the assessee's claim is based on a judicial pronouncement; in such cases it may be advisable to report the amount admissible, with the amount claimed and the background and basis of the claim forming part of the working papers;
- if the claim is well founded and settled by judicial pronouncement, the tax auditor may accept it, but must record in his working papers that the admissible amount has been reported on that basis; and
- in appropriate circumstances, such judicial pronouncements should be mentioned in the report.
Where a separate report or certificate exists
Paragraph 65.5: certain Chapter VI-A sections — the examples given are 80-IA, 80-IB, 80-IC and 80JJAA — require a separate audit report or certificate. An assessee with income from an industrial undertaking covered by them must obtain that report with reference to the accounts of the undertaking. While giving information on the deduction, the tax auditor should refer to those separate audit reports or certificates, whether given by him or by another auditor, and the figures in them should be taken into consideration. Where the certificate is from another auditor, SA 600 applies.
Paragraph 65.6 says the same for section 10AA: the information can be verified from the chartered accountant's certificate, and where the section 10AA report was issued by another chartered accountant, that may be taken into consideration, again with attention to SA 600.
Payment-based and income-based deductions
Paragraph 65.7 distinguishes two families:
- Sections relating to expenditure incurred — 80G (donations), 80GGB and 80GGC (contributions to political parties), 80JJAA (wages of new workmen).
- Sections relating to income — 80P (income of co-operative societies), 80JJA (specified business relating to treatment of biodegradable waste).
For all of them, the auditor should ascertain whether any expenditure or income covered by those sections is recorded in the books audited by him, and verify the information on the basis of examination of the books of account and other records.
Note also the connection back to clause 21(a): section 80GGB allows a company's contribution to political parties and electoral trusts as a deduction reportable here, while advertisement in a political party's souvenir is a disallowance reportable at clause 21(a)(iii). The two are different transactions: the contribution belongs at clause 33, the advertisement at clause 21(a).
The concessional regime bar
Paragraph 65.8: sections 115BA, 115BAA, 115BAB, 115BAC, 115BAD and 115BAE provide that no deductions under Chapter VI-A or Chapter III can be claimed by an assessee opting for taxation under them, except certain deductions specified in the relevant section. So the reply to clause 8a shall be considered, and the admissibility of deductions examined accordingly.
The commonly surviving deduction across those regimes is section 80JJAA, with section 80M also preserved under sections 115BAA and 115BAB, and sections 80CCD(2) and 80CCH(2) under section 115BAC.
Worked example
| Deduction | Reporting at clause 33 |
|---|---|
| Section 80JJAA on additional employee cost, supported by the separate report | Report the admissible amount, cross-referring the separate report |
| Section 80-IA on an infrastructure undertaking, report by another auditor | Take the figures into consideration under SA 600 |
| Section 10AA on an SEZ unit | Verify from the chartered accountant's certificate; remark that admissibility is subject to timely filing |
| Section 80G donation claimed in the return but not routed through the audited books | Not reported at clause 33; the return may legitimately differ |
| Company that has opted for section 115BAA | Nil except section 80JJAA and 80M — read clause 8a first |
| Section 10A | Not available from A.Y. 2012-13, though the clause still lists it |
Audit checklist
- Read clause 8a before clause 33; a concessional regime bars most Chapter VI-A and Chapter III deductions.
- Report only from the books audited under section 44AB, and add remarks where the scope is a branch or unit.
- Apply SA 600 to branch reports and to other auditors' certificates.
- Test each section's own conditions against documentary evidence.
- Add the section 80AC remark making Part C and section 10AA claims subject to timely filing.
- Cross-refer separate audit reports for sections such as 80-IA, 80-IB, 80-IC and 80JJAA.
- Record in the working papers where an amount is reported on the basis of a judicial pronouncement, and mention it in the report where appropriate.
- Expect and explain a difference between the report and the return.
Common mistakes
- Copying the return's Chapter VI-A claim into clause 33 without testing it against the audited books.
- Omitting the section 80AC remark and reporting Part C deductions unconditionally.
- Reporting a Chapter III exemption other than sections 10A and 10AA.
- Ignoring a separate audit report or another auditor's certificate.
- Reporting deductions barred by the regime selected at clause 8a.