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Form 35 Under Income Tax Act, 2025: Key Compliance Guide for Offshore Banking Units

Learn about Form 35 under the Income Tax Act, 2025, including applicability, filing requirements, CA certification, and deduction claims for Offshore Banking Units (OBUs) and IFSC units.

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Form 35Income Tax Act 2025Offshore Banking UnitsIFSCSection 147OBU deductiontax compliancebanking taxationCA certificationSEZ banking

Form 35 Under Income Tax Act, 2025: Key Details for Offshore Banking Units

The Income Tax Act, 2025 has introduced updated compliance requirements for certain banking entities operating Offshore Banking Units (OBUs) and units in International Financial Services Centres (IFSCs). As part of these changes, Form 35 has been prescribed for claiming deductions under Section 147(4)(a) of the new tax law.

What is Form 35?

Form 35 is a Chartered Accountant-certified report required for eligible banks claiming deductions on income earned through:

  • Offshore Banking Units located in Special Economic Zones (SEZs)
  • Units operating in IFSCs

The form helps tax authorities verify deduction claims made under the Income Tax Act, 2025.

Who Needs to File It?

Form 35 mainly applies to:

  • Scheduled banks
  • Foreign banks

that operate eligible OBU or IFSC units and claim deductions under Section 147.

It does not apply to regular taxpayers or ordinary businesses.

Key Information Required

The form generally includes:

  • Taxpayer and PAN details
  • Tax Year information
  • Details of the OBU or IFSC unit
  • Deduction computation details
  • Income and expense information
  • Regulatory approval details

The report must be certified by a Chartered Accountant before filing.

Filing Requirement

Form 35 is generally required to be furnished electronically along with the Return of Income through the prescribed e-filing process.

Failure to furnish the required report may impact the deduction claim during assessment proceedings.

Conclusion

Form 35 is an important compliance requirement for eligible banking entities claiming deductions related to Offshore Banking Units and IFSC operations under the Income Tax Act, 2025. Proper documentation, accurate reporting, and timely CA certification are essential for smooth tax compliance.