FORM 21— Frequently Asked Questions (FAQs)

Notification format for Agricultural Extension Project under Section 47(1)(a) of the Income-tax Act, 2025

1. What is Form 21?

Ans: Form 21 is an Income-tax notification form issued for an approved agricultural extension project under Section 47(1)(a) of the Income-tax Act, 2025, pursuant to approval granted under Rule 37.

2. What is the purpose of Form 21?

Ans: The primary purpose of Form 21 is to:

• Notify an approved agricultural extension project in the Official Gazette.
• Specify the Tax Year(s) for which the project is approved.
• Lay down the terms, conditions, duration, and expenditure limits applicable to the project.
• Enable tax benefits linked to approved agricultural extension projects under Section 47(1)(a).

3. Who issues Form 21?

Ans: Form 21 is issued by the Central Board of Direct Taxes (CBDT) after satisfaction that the project meets conditions prescribed under Rule 37.

4. When is Form 21 issued?

Ans: Form 21 is issued after Form 20 is examined and approved, and the project qualifies for notification under Section 47(1)(a) of the Income-tax Act, 2025.

5. What details are contained in Form 21?

Ans: Form 21 contains:

• Name, address, and PAN of the applicant.
• Reference number and date of application.
• Title and purpose of the agricultural extension project.
• Date of commencement and duration of the project.
• Approved Tax Year(s).
• Estimated total project expenditure (excluding land/building).
• Charges, if any, proposed to be collected from beneficiaries.
• Specific conditions imposed on the project.

6. Which agricultural extension projects are eligible to be notified under Form 21?

Ans: A project is eligible if:

• It is undertaken for training, education, and guidance of farmers.
• It has prior approval from the Ministry of Agriculture and Farmers Welfare.
• Expected expenditure (excluding land/building) exceeds ₹25 lakh.
• It complies with Rule 37 of the Income-tax Rules, 2025.

7. For how long is an agricultural extension project notified under Form 21?

Ans: The project may be notified for a period not exceeding three Tax Years, as specified in the notification.

8. Can the notification under Form 21 be extended?

Ans: Yes. The assessee may apply for renewal or extension of notification at least three months before expiry of the existing approval period.

9. What happens after Form 21 is issued?

Ans: After issuance:

• The notification is published in the Official Gazette.
• Copies are sent to:
• The applicant
• Ministry of Agriculture and Farmers Welfare
• Jurisdictional Commissioner of Income-tax
• State Department of Agriculture
• Agricultural Technology Management Agency (ATMA)

10. Can Form 21 be revised or withdrawn?

Ans: No. Once Form 21 is issued and published, it cannot be revised or withdrawn, except through revocation proceedings under Rule 37.

11. Under what circumstances can a Form 21 notification be revoked?

Ans: Notification may be revoked if:

• The assessee ceases project activities.
• Project activities are not genuine.
• Conditions of approval are violated.
• Provisions of Rule 37 or Rule 38 are not complied with.

12. Is any compliance required after Form 21 is issued?

Ans: Yes. The assessee must:

• Follow all conditions mentioned in Form 21.
• Ensure project funds are used only for approved purposes.
• Maintain records for monitoring and reporting.

13. Is any information in Form 21 auto-filled?

Ans: Yes. Some information may be auto-populated based on Form 20 and departmental records.

14. How is Form 21 authenticated and verified?

Ans: Form 21 is authenticated through:

• Authorized CBDT officer’s signature.
• Official notification in the Gazette of India.

15. When are UDIN and FRN applicable in relation to Form 21?

Ans:

• UDIN (Unique Document Identification Number): Where Chartered Accountant certification supports expenditure or audit reporting, UDIN must be generated and quoted.
• FRN (Firm Registration Number): If certification is issued by an audit firm, the Firm Registration Number (FRN) must be disclosed.
• DSC (Digital Signature Certificate): A valid DSC is required for electronic submission of related filings.

16. What are common reasons for rejection or cancellation of Form 21 notification?

Ans:

• Incomplete or misleading project information.
• Failure to meet expenditure thresholds.
• Non-compliance with Ministry approval conditions.
• Violation of notification conditions.

17. What is the objective of Form 21 under the Income-tax Act, 2025?

Ans: Form 21 ensures:

• Formal Government notification of approved agricultural extension projects.
• Transparent disclosure of project scope, duration, and financial limits.
• Effective monitoring and accountability.
• Standardized implementation of Section 47(1)(a) under the Income-tax Act, 2025.