First Schedule 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.
Parts II to IV of the First Schedule reach members who are not in practice and, in Parts III and IV, every member. Part II covers a member in service who shares his emoluments or takes commission from the employer's advisers. Part III covers acting as a fellow when not one, not supplying information the Institute asks for, and giving false information when seeking work. Part IV covers "other misconduct": a conviction for a lesser offence, and bringing disrepute to the profession or the Institute. This article follows the text as per the Act as printed in the ICAI edition of 2022 (amended up to the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Act, 2022).
Part II applies to a member (other than one in practice) who is an employee of a company, firm or person. Part III applies to every member, in practice or not, and covers acting as a fellow without being one, failing to supply information called for by the Institute's bodies and giving false information when seeking work. Part IV treats as "other misconduct" a conviction for an offence punishable with imprisonment not exceeding six months and conduct that, in the opinion of the Council, brings disrepute to the profession or the Institute.
How the Parts fit
Section 22 deems acts and omissions in the Schedules to be professional or other misconduct (our article on sections 21C, 21D and 22 explains it). Part I of the First Schedule is for members in practice; see our articles on items (1) to (4), items (5) to (7) and items (9) and (12). Parts II to IV, covered here, apply beyond the practising member.
| Part | Applies to | Label |
|---|---|---|
| II | A member (other than in practice) who is an employee of a company, firm or person | Professional misconduct |
| III | A member, whether in practice or not | Professional misconduct |
| IV | A member, whether in practice or not | Other misconduct |
A member who is under an inquiry, or an employer who has found a problem with an employed member's conduct, will find these Parts relevant. If a notice or complaint has been received under any of them, our legal dispute resolution team can help you read it against the text.
Route and commencement. First Schedule matters go to the Board of Discipline under section 21(3) as in force. The 2022 heading reference ("21(6), 21A(5) and (6), 21B(5) and (6)") is enacted but not yet in force; the reference in force is "21(3), 21A(3)". A later commencement notification should be checked. Our article on section 21A explains the penalties the Board may impose as in force.
Part II: members in service
"A member of the Institute (other than a member in practice) shall be deemed to be guilty of professional misconduct, if he being an employee of any company, firm or person -"
- Item (1): pays or allows or agrees to pay, directly or indirectly, to any person any share in the emoluments of the employment undertaken by him.
- Item (2): accepts or agrees to accept any part of fees, profits or gains from a lawyer, a chartered accountant or broker engaged by such company, firm or person, or agent or customer of such company, firm or person, by way of commission or gratification.
Item (1) is about money going out: giving a share of one's own pay or emoluments to someone. Item (2) is about money coming in: taking a cut from the professionals and counterparties the employer deals with. Item (2) uses the word "gratification", which the text does not define.
Part II should be read alongside Part II of the Second Schedule, whose item (2) deals with an employed member disclosing confidential information; that item has its own post, an employed member's duty of confidence.
Part III: members generally
"A member of the Institute, whether in practice or not, shall be deemed to be guilty of professional misconduct, if he -"
- Item (1): not being a fellow of the Institute, acts as a fellow of the Institute.
- Item (2): does not supply the information called for, or does not comply with the requirements asked for, by the Institute, the Council or any of its Committees, the Director (Discipline), the Board of Discipline, the Disciplinary Committee, the Quality Review Board or the Appellate Authority.
- Item (3): while inviting professional work from another chartered accountant, or responding to tenders or enquiries, or advertising through a write-up, or anything provided for in items (6) and (7) of Part I, gives information knowing it to be false.
Observations:
- Item (1) concerns the grade of membership. Section 5 distinguishes fellows and associates, as explained in our article on section 5 on fellows and associates.
- Item (2) is a duty to respond. Eight bodies are listed, from the Institute and the Council to the Quality Review Board and the Appellate Authority. Ignoring a call for information is itself misconduct, apart from whatever the inquiry was about.
- Item (3) is tied to the provisos of items (6) and (7) of Part I. The channels those provisos open must not be used with information known to be false.
Part IV: other misconduct
"A member of the Institute, whether in practice or not, shall be deemed to be guilty of other misconduct, if he -"
- Item (1): is held guilty by any civil or criminal court for an offence which is punishable with imprisonment for a term not exceeding six months.
- Item (2): in the opinion of the Council, brings disrepute to the profession or the Institute as a result of his action whether or not related to his professional work.
Three points:
- Item (1) is about a finding of guilt by a civil or criminal court, and about the offence's punishment range, not the sentence actually imposed. An offence punishable with imprisonment exceeding six months falls under Part III of the Second Schedule instead, taken up in our article on the Second Schedule, Part I items (8) and (9), Part II items (3) to (5) and Part III.
- Item (2) turns on "the opinion of the Council". The text sets no checklist and puts the opinion in the Council's hands.
- "Whether or not related to his professional work". Conduct outside the profession can be reached.
| Offence | Where it falls |
|---|---|
| Punishable with imprisonment not exceeding six months | First Schedule, Part IV, item (1) |
| Punishable with imprisonment exceeding six months | Second Schedule, Part III |
A worked example
Rohit, an invented member, works as finance head of a manufacturing company. A broker engaged by the company pays him a "thank-you" commission for the business it received. That falls within Part II, item (2). Rohit is also asked by a Committee of the Institute for particulars about the matter and does not reply; Part III, item (2) is engaged on its own. If he were separately held guilty by a criminal court for an offence punishable with imprisonment up to six months, Part IV, item (1) would apply.
Need help with a notice under the Schedules?
A complaint may sit under more than one Part, and a request for information from the Institute carries its own consequence. Our legal dispute resolution practice can read the notice with you and prepare the reply.
Key takeaways
- Part II: an employed member must not share his emoluments or take commission or gratification from the employer's advisers or counterparties.
- Part III: do not act as a fellow if you are not one, do not ignore requests for information from the Institute's bodies, and do not give false information when seeking work.
- Part IV: a conviction for an offence punishable with up to six months' imprisonment, and disrepute in the Council's opinion, are "other misconduct".
- An offence punishable with more than six months falls under Part III of the Second Schedule.
Read next
- First Schedule Part I, items (5) to (7): securing work and advertising
- Second Schedule, Part I items (8) and (9), Part II items (3) to (5) and Part III
- Section 21: the Disciplinary Directorate
- An employed member's duty of confidence under the Second Schedule
Disclaimer: Based on the Chartered Accountants Act, 1949 as printed in the ICAI edition of 2022 (amended up to Act 12 of 2022), read with S.O. 2184(E) dated 10 May 2022, which brought only part of the 2022 amendments into force, as consulted on 3 October 2026. Regulations, rules, Council guidelines, later amendments and commencement notifications should be checked. This article is general information, not legal advice; check the official text before acting.