Recent amendments in Audit, IT & ICDS

CA. PRAMOD JAIN
FCA, FCS, FCMA, LL.B, MIMA, DISA
CA. PRAMOD JAIN
FCA, FCS, FCMA, LL.B, MIMA, DISA
Sangrur Branch
Of
NIRC of ICAI
6th May 2017
Sangrur Branch
Of
NIRC of ICAI
6th May 2017
CASH RESTRICTIONS
DEMONETIZATION REPORTING
ICDS OVERVIEW
ICDS (I, II, IV, V, VIII & IX)
AS AMENDMENTS
PRESUMPTIVE TAXATION
CG ON SHARES

CASH RESTRICTIONSCASH RESTRICTIONSCASH RESTRICTIONSCASH RESTRICTIONS
CA. Pramod Jain

DEDUCTION U/S 80 GDEDUCTION U/S 80 GDEDUCTION U/S 80 GDEDUCTION U/S 80 G
• Not admissible if donation made exceedingNot admissible if donation made exceedingNot admissible if donation made exceedingNot admissible if donation made exceeding RsRsRsRs. 2000 in. 2000 in. 2000 in. 2000 in
cash by a person (Earliercash by a person (Earliercash by a person (Earliercash by a person (Earlier RsRsRsRs. 10000/. 10000/. 10000/. 10000/----). Cl. 33 Form 3CD). Cl. 33 Form 3CD). Cl. 33 Form 3CD). Cl. 33 Form 3CD
• ABC Trust receivesABC Trust receivesABC Trust receivesABC Trust receives RsRsRsRs. 9000/. 9000/. 9000/. 9000/---- from Mr. B in cash on 6from Mr. B in cash on 6from Mr. B in cash on 6from Mr. B in cash on 6thththth
May 2017. Is there any implication on Trust or Mr. B ?May 2017. Is there any implication on Trust or Mr. B ?May 2017. Is there any implication on Trust or Mr. B ?May 2017. Is there any implication on Trust or Mr. B ?
• Mr. X gives following donations to PQR Trust.?:Mr. X gives following donations to PQR Trust.?:Mr. X gives following donations to PQR Trust.?:Mr. X gives following donations to PQR Trust.?:
• 20.4.201720.4.201720.4.201720.4.2017 RsRsRsRs. 1500/. 1500/. 1500/. 1500/----
• 25.4.201725.4.201725.4.201725.4.2017 RsRsRsRs. 1500/. 1500/. 1500/. 1500/----
• 06.5.201706.5.201706.5.201706.5.2017 RsRsRsRs. 1500/. 1500/. 1500/. 1500/----
• NilNilNilNil
• Mr. A gives following donations:Mr. A gives following donations:Mr. A gives following donations:Mr. A gives following donations:
• To ABC TrustTo ABC TrustTo ABC TrustTo ABC Trust RsRsRsRs. 1500/. 1500/. 1500/. 1500/----
• To PQR TrustTo PQR TrustTo PQR TrustTo PQR Trust RsRsRsRs. 1500/. 1500/. 1500/. 1500/----
• To XYZ TrustTo XYZ TrustTo XYZ TrustTo XYZ Trust RsRsRsRs. 1500/. 1500/. 1500/. 1500/----
• NilNilNilNil
CA. Pramod Jain

S. 40A(3) / 40A (3A)S. 40A(3) / 40A (3A)S. 40A(3) / 40A (3A)S. 40A(3) / 40A (3A)
• Expenditure u/s 40A(3) / 40A(3A)Expenditure u/s 40A(3) / 40A(3A)Expenditure u/s 40A(3) / 40A(3A)Expenditure u/s 40A(3) / 40A(3A)
disallowed in payment made in cashdisallowed in payment made in cashdisallowed in payment made in cashdisallowed in payment made in cash
exceedingexceedingexceedingexceeding RsRsRsRs. 10000/. 10000/. 10000/. 10000/---- per person perper person perper person perper person per
day (Oldday (Oldday (Oldday (Old RsRsRsRs. 20000/. 20000/. 20000/. 20000/----))))
• Limits:Limits:Limits:Limits:
• RsRsRsRs. 2500/. 2500/. 2500/. 2500/---- 1.4.19691.4.19691.4.19691.4.1969
• RsRsRsRs. 10000/. 10000/. 10000/. 10000/---- 1.4.19891.4.19891.4.19891.4.1989
• RsRsRsRs. 20000/. 20000/. 20000/. 20000/---- 1.4.19971.4.19971.4.19971.4.1997
• RsRsRsRs. 10000/. 10000/. 10000/. 10000/---- 1.4.20171.4.20171.4.20171.4.2017
• Reportable in clause 21 (d) of Form 3CDReportable in clause 21 (d) of Form 3CDReportable in clause 21 (d) of Form 3CDReportable in clause 21 (d) of Form 3CD
CA. Pramod Jain

S. 40A(3) / 40A (3A)S. 40A(3) / 40A (3A)S. 40A(3) / 40A (3A)S. 40A(3) / 40A (3A)
• ABC & Co. pays wages to its 50 employees as per theABC & Co. pays wages to its 50 employees as per theABC & Co. pays wages to its 50 employees as per theABC & Co. pays wages to its 50 employees as per the
minimum wages Actminimum wages Actminimum wages Actminimum wages Act RsRsRsRs. 14000/. 14000/. 14000/. 14000/---- per month in cash?per month in cash?per month in cash?per month in cash?
• Service of Car ofService of Car ofService of Car ofService of Car of RsRsRsRs. 11500/. 11500/. 11500/. 11500/----????
• Payment of RentPayment of RentPayment of RentPayment of Rent RsRsRsRs. 12000/. 12000/. 12000/. 12000/---- pm?pm?pm?pm?
• Payment of bill at Restaurant ofPayment of bill at Restaurant ofPayment of bill at Restaurant ofPayment of bill at Restaurant of RsRsRsRs. 10400/. 10400/. 10400/. 10400/----
• XYZ P. Ltd. purchases raw material through an invoiceXYZ P. Ltd. purchases raw material through an invoiceXYZ P. Ltd. purchases raw material through an invoiceXYZ P. Ltd. purchases raw material through an invoice
dtdtdtdt 18.4.2017 of18.4.2017 of18.4.2017 of18.4.2017 of RsRsRsRs. 45000/. 45000/. 45000/. 45000/----. Makes payment. Makes payment. Makes payment. Makes payment RsRsRsRs....
9000/9000/9000/9000/---- per day?per day?per day?per day?
• Would there be any difference if invoice is ofWould there be any difference if invoice is ofWould there be any difference if invoice is ofWould there be any difference if invoice is of RsRsRsRs. 2.50. 2.50. 2.50. 2.50
Lakhs and payment is less thanLakhs and payment is less thanLakhs and payment is less thanLakhs and payment is less than RsRsRsRs. 10K per day?. 10K per day?. 10K per day?. 10K per day?
• XYZ P. Ltd. makes payment to its Sundry Creditor ofXYZ P. Ltd. makes payment to its Sundry Creditor ofXYZ P. Ltd. makes payment to its Sundry Creditor ofXYZ P. Ltd. makes payment to its Sundry Creditor of
FY 2015FY 2015FY 2015FY 2015----16 of16 of16 of16 of RsRsRsRs. 2 Lakhs of. 2 Lakhs of. 2 Lakhs of. 2 Lakhs of RsRsRsRs. 15000/. 15000/. 15000/. 15000/---- per day inper day inper day inper day in
cash incash incash incash in April 2017?April 2017?April 2017?April 2017?
CA. Pramod Jain

ASSETSASSETSASSETSASSETS
• Depreciation disallowed on cashDepreciation disallowed on cashDepreciation disallowed on cashDepreciation disallowed on cash
component of asset cost exceedingcomponent of asset cost exceedingcomponent of asset cost exceedingcomponent of asset cost exceeding RsRsRsRs....
10000/10000/10000/10000/---- per person per day.per person per day.per person per day.per person per day.
• Capital Gain?Capital Gain?Capital Gain?Capital Gain?
• Deferred Tax?Deferred Tax?Deferred Tax?Deferred Tax?
• MAT?MAT?MAT?MAT?
• Rule 6DD?Rule 6DD?Rule 6DD?Rule 6DD?
• S. 35AD benefit not allowed on exp.S. 35AD benefit not allowed on exp.S. 35AD benefit not allowed on exp.S. 35AD benefit not allowed on exp.
incurred exceedingincurred exceedingincurred exceedingincurred exceeding RsRsRsRs. 10000/. 10000/. 10000/. 10000/---- perperperper
person per dayperson per dayperson per dayperson per day
CA. Pramod Jain

SECTION 269 STSECTION 269 STSECTION 269 STSECTION 269 ST
• No person to receive an amountNo person to receive an amountNo person to receive an amountNo person to receive an amount >>>> RsRsRsRs....
2 L in cash2 L in cash2 L in cash2 L in cash
• in aggregate from a person in ain aggregate from a person in ain aggregate from a person in ain aggregate from a person in a
day; orday; orday; orday; or
• in respect of a single transaction;in respect of a single transaction;in respect of a single transaction;in respect of a single transaction;
orororor
• in respect of transactions relatingin respect of transactions relatingin respect of transactions relatingin respect of transactions relating
to one event or occasion from ato one event or occasion from ato one event or occasion from ato one event or occasion from a
personpersonpersonperson
CA. Pramod Jain

• Not applicable to receipts by:Not applicable to receipts by:Not applicable to receipts by:Not applicable to receipts by:
• Government,Government,Government,Government,
• Bank,Bank,Bank,Bank,
• Post Office Savings Bank or CoPost Office Savings Bank or CoPost Office Savings Bank or CoPost Office Savings Bank or Co----operativeoperativeoperativeoperative
Bank,Bank,Bank,Bank,
• S. 269SS transactionsS. 269SS transactionsS. 269SS transactionsS. 269SS transactions
• Such other persons or class of persons orSuch other persons or class of persons orSuch other persons or class of persons orSuch other persons or class of persons or
receipts, which the CG may notifyreceipts, which the CG may notifyreceipts, which the CG may notifyreceipts, which the CG may notify
• No applicable to receipts from Bank,No applicable to receipts from Bank,No applicable to receipts from Bank,No applicable to receipts from Bank, Post
Office Savings Bank or Co-operative Bank
• Penalty of equal amount u/s 271DAPenalty of equal amount u/s 271DAPenalty of equal amount u/s 271DAPenalty of equal amount u/s 271DA
• Rule 6DD?Rule 6DD?Rule 6DD?Rule 6DD?
CA. Pramod Jain

• Father of Ms. C receives gifts from various persons onFather of Ms. C receives gifts from various persons onFather of Ms. C receives gifts from various persons onFather of Ms. C receives gifts from various persons on
occasion of C’s marriage aggregatingoccasion of C’s marriage aggregatingoccasion of C’s marriage aggregatingoccasion of C’s marriage aggregating RsRsRsRs. 4 Lakhs?. 4 Lakhs?. 4 Lakhs?. 4 Lakhs?
• NoNoNoNo
• On the occasion of marriage Mr. B’s father madeOn the occasion of marriage Mr. B’s father madeOn the occasion of marriage Mr. B’s father madeOn the occasion of marriage Mr. B’s father made
payments ofpayments ofpayments ofpayments of RsRsRsRs. 2.75 Lakhs in cash to following:. 2.75 Lakhs in cash to following:. 2.75 Lakhs in cash to following:. 2.75 Lakhs in cash to following:
• To horse cartTo horse cartTo horse cartTo horse cart –––– RsRsRsRs. 50K. 50K. 50K. 50K
• To event manager for partyTo event manager for partyTo event manager for partyTo event manager for party RsRsRsRs. 1.75 Lakhs. 1.75 Lakhs. 1.75 Lakhs. 1.75 Lakhs
• To band masterTo band masterTo band masterTo band master RsRsRsRs. 50K. 50K. 50K. 50K
• NoNoNoNo
• On the occasion of marriage of Ms. C the eventOn the occasion of marriage of Ms. C the eventOn the occasion of marriage of Ms. C the eventOn the occasion of marriage of Ms. C the event
manager receivesmanager receivesmanager receivesmanager receives RsRsRsRs. 3.95 L on 22.4.2017 in cash:. 3.95 L on 22.4.2017 in cash:. 3.95 L on 22.4.2017 in cash:. 3.95 L on 22.4.2017 in cash:
• RsRsRsRs. 1.50 Lakhs from mother of C. 1.50 Lakhs from mother of C. 1.50 Lakhs from mother of C. 1.50 Lakhs from mother of C
• RsRsRsRs. 1.95 Lakhs from father of C. 1.95 Lakhs from father of C. 1.95 Lakhs from father of C. 1.95 Lakhs from father of C
• RsRsRsRs. 50000/. 50000/. 50000/. 50000/---- from brother of Cfrom brother of Cfrom brother of Cfrom brother of C
• NoNoNoNo
CA. Pramod Jain

• For marriage the event manager receivesFor marriage the event manager receivesFor marriage the event manager receivesFor marriage the event manager receives RsRsRsRs....
3.50 Lakhs where father of bride pays3.50 Lakhs where father of bride pays3.50 Lakhs where father of bride pays3.50 Lakhs where father of bride pays RsRsRsRs....
1.75 L & groom’s father pays1.75 L & groom’s father pays1.75 L & groom’s father pays1.75 L & groom’s father pays RsRsRsRs. 1.75 L in. 1.75 L in. 1.75 L in. 1.75 L in
cash?cash?cash?cash?
• NoNoNoNo
• On the occasion of marriage of Ms. C, ABOn the occasion of marriage of Ms. C, ABOn the occasion of marriage of Ms. C, ABOn the occasion of marriage of Ms. C, AB
Jewellers sold jewellery as under:Jewellers sold jewellery as under:Jewellers sold jewellery as under:Jewellers sold jewellery as under:
• Mother of Ms. CMother of Ms. CMother of Ms. CMother of Ms. C RsRsRsRs 1.90 Lakhs on 18.4.20171.90 Lakhs on 18.4.20171.90 Lakhs on 18.4.20171.90 Lakhs on 18.4.2017
• Mother of Ms. CMother of Ms. CMother of Ms. CMother of Ms. C RsRsRsRs. 1.75 Lakhs on 20.4.2017. 1.75 Lakhs on 20.4.2017. 1.75 Lakhs on 20.4.2017. 1.75 Lakhs on 20.4.2017
• MotherMotherMotherMother----in Law of Ms. Cin Law of Ms. Cin Law of Ms. Cin Law of Ms. C RsRsRsRs. 2.50 Lakhs on 18.4.17. 2.50 Lakhs on 18.4.17. 2.50 Lakhs on 18.4.17. 2.50 Lakhs on 18.4.17
• Sister of Ms. CSister of Ms. CSister of Ms. CSister of Ms. C RsRsRsRs. 1.50 Lakhs on 20.4.2017. 1.50 Lakhs on 20.4.2017. 1.50 Lakhs on 20.4.2017. 1.50 Lakhs on 20.4.2017
• Bua of Ms. CBua of Ms. CBua of Ms. CBua of Ms. C RsRsRsRs. 1 lakh on 20.4.2017. 1 lakh on 20.4.2017. 1 lakh on 20.4.2017. 1 lakh on 20.4.2017
• 2.50 L2.50 L2.50 L2.50 L
CA. Pramod Jain

• AAAA MandirMandirMandirMandir on the occasion ofon the occasion ofon the occasion ofon the occasion of JanamashtamiJanamashtamiJanamashtamiJanamashtami
receivesreceivesreceivesreceives RsRsRsRs. 5 lakhs on opening of Golak?. 5 lakhs on opening of Golak?. 5 lakhs on opening of Golak?. 5 lakhs on opening of Golak?
• NoNoNoNo
• X takes cash loan ofX takes cash loan ofX takes cash loan ofX takes cash loan of RsRsRsRs. 1.75 Lakhs from Y?. 1.75 Lakhs from Y?. 1.75 Lakhs from Y?. 1.75 Lakhs from Y?
• NoNoNoNo
• X makes repayment of loan along with interestX makes repayment of loan along with interestX makes repayment of loan along with interestX makes repayment of loan along with interest
ofofofof RsRsRsRs. 2.20 Lakhs in Cash to Y?. 2.20 Lakhs in Cash to Y?. 2.20 Lakhs in Cash to Y?. 2.20 Lakhs in Cash to Y?
• Yes, also 269TYes, also 269TYes, also 269TYes, also 269T
• Mr. Y from Australia comes to India. On arrivalMr. Y from Australia comes to India. On arrivalMr. Y from Australia comes to India. On arrivalMr. Y from Australia comes to India. On arrival
he falls ill & is hospitalised. His bill is ofhe falls ill & is hospitalised. His bill is ofhe falls ill & is hospitalised. His bill is ofhe falls ill & is hospitalised. His bill is of RsRsRsRs....
2.25 Lacs which he wants to pay in 35002.25 Lacs which he wants to pay in 35002.25 Lacs which he wants to pay in 35002.25 Lacs which he wants to pay in 3500
dollars as he doesn't have rupees?dollars as he doesn't have rupees?dollars as he doesn't have rupees?dollars as he doesn't have rupees?
• NoNoNoNo
CA. Pramod Jain

• X sells the following to Y:X sells the following to Y:X sells the following to Y:X sells the following to Y:
• Car forCar forCar forCar for RsRsRsRs. 1.90 Lakhs on 1.5.2017. 1.90 Lakhs on 1.5.2017. 1.90 Lakhs on 1.5.2017. 1.90 Lakhs on 1.5.2017
• Land forLand forLand forLand for RsRsRsRs. 1.75 Lakhs on 4.5.2017. 1.75 Lakhs on 4.5.2017. 1.75 Lakhs on 4.5.2017. 1.75 Lakhs on 4.5.2017
• Y makes the payment in cash as follows:Y makes the payment in cash as follows:Y makes the payment in cash as follows:Y makes the payment in cash as follows:
• RsRsRsRs. 1 Lakh on 2.5.2017. 1 Lakh on 2.5.2017. 1 Lakh on 2.5.2017. 1 Lakh on 2.5.2017
• RsRsRsRs. 1 Lakh on 5.5.2017. 1 Lakh on 5.5.2017. 1 Lakh on 5.5.2017. 1 Lakh on 5.5.2017
• RsRsRsRs. 1.65 Lakhs on 6.5.2017. 1.65 Lakhs on 6.5.2017. 1.65 Lakhs on 6.5.2017. 1.65 Lakhs on 6.5.2017
• NoNoNoNo
• Would it make difference if total paymentWould it make difference if total paymentWould it make difference if total paymentWould it make difference if total payment
is made on 6.5.2017?is made on 6.5.2017?is made on 6.5.2017?is made on 6.5.2017?
• YesYesYesYes
CA. Pramod Jain

• Mr. A receives cash payment ofMr. A receives cash payment ofMr. A receives cash payment ofMr. A receives cash payment of RsRsRsRs. 3.50 Lakhs from. 3.50 Lakhs from. 3.50 Lakhs from. 3.50 Lakhs from
ABC P. Ltd. on 15ABC P. Ltd. on 15ABC P. Ltd. on 15ABC P. Ltd. on 15thththth May 2017 for the following:May 2017 for the following:May 2017 for the following:May 2017 for the following:
• RsRsRsRs. 2.10 Lakhs part payment for invoice no. 4.. 2.10 Lakhs part payment for invoice no. 4.. 2.10 Lakhs part payment for invoice no. 4.. 2.10 Lakhs part payment for invoice no. 4. dt.dt.dt.dt.
17.4.2017 of17.4.2017 of17.4.2017 of17.4.2017 of RsRsRsRs. 3 Lakhs. 3 Lakhs. 3 Lakhs. 3 Lakhs
• RsRsRsRs. 1 Lakh part payment for invoice no. 6. 1 Lakh part payment for invoice no. 6. 1 Lakh part payment for invoice no. 6. 1 Lakh part payment for invoice no. 6 dt.dt.dt.dt.
30.4.2017 of30.4.2017 of30.4.2017 of30.4.2017 of RsRsRsRs. 2.50 Lakhs. 2.50 Lakhs. 2.50 Lakhs. 2.50 Lakhs
• RsRsRsRs. 40K part payment for invoice no. 12. 40K part payment for invoice no. 12. 40K part payment for invoice no. 12. 40K part payment for invoice no. 12 dtdtdtdt
10.5.2017 of10.5.2017 of10.5.2017 of10.5.2017 of RsRsRsRs. 2 Lakhs. 2 Lakhs. 2 Lakhs. 2 Lakhs
• Implications are:Implications are:Implications are:Implications are:
• 271DA penalty on Mr. A for271DA penalty on Mr. A for271DA penalty on Mr. A for271DA penalty on Mr. A for RsRsRsRs. 3.50 Lakhs. 3.50 Lakhs. 3.50 Lakhs. 3.50 Lakhs
• Mr. A to reportMr. A to reportMr. A to reportMr. A to report RsRsRsRs. 2.10 Lakhs in AIR in Form 61A. 2.10 Lakhs in AIR in Form 61A. 2.10 Lakhs in AIR in Form 61A. 2.10 Lakhs in AIR in Form 61A
• ABC P. Ltd expense ofABC P. Ltd expense ofABC P. Ltd expense ofABC P. Ltd expense of RsRsRsRs. 3.50 Lakhs would be. 3.50 Lakhs would be. 3.50 Lakhs would be. 3.50 Lakhs would be
disallowed u/s 40A(3)disallowed u/s 40A(3)disallowed u/s 40A(3)disallowed u/s 40A(3)
CA. Pramod Jain

• A charitable trust organises 3 daysA charitable trust organises 3 daysA charitable trust organises 3 daysA charitable trust organises 3 days SatsangSatsangSatsangSatsang ofofofof
PanditPanditPanditPandit jijijiji. It receives followings in cash:. It receives followings in cash:. It receives followings in cash:. It receives followings in cash:
• RsRsRsRs. 10 lacs as donations from various. 10 lacs as donations from various. 10 lacs as donations from various. 10 lacs as donations from various
persons in 3 dayspersons in 3 dayspersons in 3 dayspersons in 3 days
• RsRsRsRs. 1.50 lacs each as sponsorship from 3. 1.50 lacs each as sponsorship from 3. 1.50 lacs each as sponsorship from 3. 1.50 lacs each as sponsorship from 3
sponsorssponsorssponsorssponsors
• It pays the following:It pays the following:It pays the following:It pays the following:
• RsRsRsRs. 1 lacs per day for tent. 1 lacs per day for tent. 1 lacs per day for tent. 1 lacs per day for tent
• RsRsRsRs. 1.50 lacs per day to caterers. 1.50 lacs per day to caterers. 1.50 lacs per day to caterers. 1.50 lacs per day to caterers
• RsRsRsRs. 75000 per day for security and. 75000 per day for security and. 75000 per day for security and. 75000 per day for security and sevadarsevadarsevadarsevadar
to manpower consultantto manpower consultantto manpower consultantto manpower consultant
• Yes, In hands of receiver for payment made by TrustYes, In hands of receiver for payment made by TrustYes, In hands of receiver for payment made by TrustYes, In hands of receiver for payment made by Trust
CA. Pramod Jain

????????????
• PQR P. Ltd receivesPQR P. Ltd receivesPQR P. Ltd receivesPQR P. Ltd receives RsRsRsRs. 5 lacs each from its 2. 5 lacs each from its 2. 5 lacs each from its 2. 5 lacs each from its 2
subscribers on incorporation in cashsubscribers on incorporation in cashsubscribers on incorporation in cashsubscribers on incorporation in cash
• YesYesYesYes
• Mr. B introducesMr. B introducesMr. B introducesMr. B introduces RsRsRsRs. 3 Lacs a capital in. 3 Lacs a capital in. 3 Lacs a capital in. 3 Lacs a capital in
partnership firm ABC & Co?partnership firm ABC & Co?partnership firm ABC & Co?partnership firm ABC & Co?
• YesYesYesYes
• Mr. B partner withdraws the following in cashMr. B partner withdraws the following in cashMr. B partner withdraws the following in cashMr. B partner withdraws the following in cash
from ABC & Co. during FY 2017from ABC & Co. during FY 2017from ABC & Co. during FY 2017from ABC & Co. during FY 2017----18:18:18:18:
• RsRsRsRs. 1.80 Lacs remuneration. 1.80 Lacs remuneration. 1.80 Lacs remuneration. 1.80 Lacs remuneration RsRsRsRs. 15K p.m.. 15K p.m.. 15K p.m.. 15K p.m.
• RsRsRsRs. 36000 being interest on 31.3.2017. 36000 being interest on 31.3.2017. 36000 being interest on 31.3.2017. 36000 being interest on 31.3.2017
• RsRsRsRs. 3 L on different dates, being profit. 3 L on different dates, being profit. 3 L on different dates, being profit. 3 L on different dates, being profit
• S. 40A(3)S. 40A(3)S. 40A(3)S. 40A(3)
CA. Pramod Jain

SHARE TRANSACTIONSSHARE TRANSACTIONSSHARE TRANSACTIONSSHARE TRANSACTIONS
• ABC Trust purchases 1 L shares of M/s XYZ P.ABC Trust purchases 1 L shares of M/s XYZ P.ABC Trust purchases 1 L shares of M/s XYZ P.ABC Trust purchases 1 L shares of M/s XYZ P.
Ltd. atLtd. atLtd. atLtd. at RsRsRsRs. 2 per share from Mr. Y on 26.4.17.. 2 per share from Mr. Y on 26.4.17.. 2 per share from Mr. Y on 26.4.17.. 2 per share from Mr. Y on 26.4.17.
Fair Value of shares isFair Value of shares isFair Value of shares isFair Value of shares is RsRsRsRs. 200/. 200/. 200/. 200/---- per share. Isper share. Isper share. Isper share. Is
there any implication on ABC Trust or Mr. Y?there any implication on ABC Trust or Mr. Y?there any implication on ABC Trust or Mr. Y?there any implication on ABC Trust or Mr. Y?
• Difference taxable in hands of bothDifference taxable in hands of bothDifference taxable in hands of bothDifference taxable in hands of both
• S. 50CAS. 50CAS. 50CAS. 50CA ---- other than quoted shares sold belowother than quoted shares sold belowother than quoted shares sold belowother than quoted shares sold below
FMVFMVFMVFMV
• “quoted share” means share quoted on any“quoted share” means share quoted on any“quoted share” means share quoted on any“quoted share” means share quoted on any
recognised SE with regularity from time torecognised SE with regularity from time torecognised SE with regularity from time torecognised SE with regularity from time to
time, where quotation of such share is basedtime, where quotation of such share is basedtime, where quotation of such share is basedtime, where quotation of such share is based
on current transaction made in ordinaryon current transaction made in ordinaryon current transaction made in ordinaryon current transaction made in ordinary
course of businesscourse of businesscourse of businesscourse of business
CA. Pramod Jain

EQUITY SHARESEQUITY SHARESEQUITY SHARESEQUITY SHARES
• 10(38)10(38)10(38)10(38) –––– Equity LTCGEquity LTCGEquity LTCGEquity LTCG ---- transfer of equity sharetransfer of equity sharetransfer of equity sharetransfer of equity share
acquired or on after 1.10.2004 available only ifacquired or on after 1.10.2004 available only ifacquired or on after 1.10.2004 available only ifacquired or on after 1.10.2004 available only if
acquisition is chargeable to STT.acquisition is chargeable to STT.acquisition is chargeable to STT.acquisition is chargeable to STT. To notifyTo notifyTo notifyTo notify
exemptions (could be IPO, FPO, Right Issue,exemptions (could be IPO, FPO, Right Issue,exemptions (could be IPO, FPO, Right Issue,exemptions (could be IPO, FPO, Right Issue,
Bonus,Bonus,Bonus,Bonus, etcetcetcetc).).).).
• Three type of transactions taxed:Three type of transactions taxed:Three type of transactions taxed:Three type of transactions taxed:
• Purchase of listed equity share in a companyPurchase of listed equity share in a companyPurchase of listed equity share in a companyPurchase of listed equity share in a company
is not entered through a recognised stockis not entered through a recognised stockis not entered through a recognised stockis not entered through a recognised stock
exchange;exchange;exchange;exchange;
• Acquisition of equity share of a companyAcquisition of equity share of a companyAcquisition of equity share of a companyAcquisition of equity share of a company
between the gap of being listed, delisted &between the gap of being listed, delisted &between the gap of being listed, delisted &between the gap of being listed, delisted &
again listedagain listedagain listedagain listed
CA. Pramod Jain

EQUITY SHARESEQUITY SHARESEQUITY SHARESEQUITY SHARES –––– DRAFT NOTIFICATIONDRAFT NOTIFICATIONDRAFT NOTIFICATIONDRAFT NOTIFICATION
• Three type of transactions taxed:Three type of transactions taxed:Three type of transactions taxed:Three type of transactions taxed:
• Where acquisition of listed equity share in aWhere acquisition of listed equity share in aWhere acquisition of listed equity share in aWhere acquisition of listed equity share in a
company, whose equity shares are notcompany, whose equity shares are notcompany, whose equity shares are notcompany, whose equity shares are not
frequently traded in a recognised stockfrequently traded in a recognised stockfrequently traded in a recognised stockfrequently traded in a recognised stock
exchange of India, is made through aexchange of India, is made through aexchange of India, is made through aexchange of India, is made through a
preferential issue other than thosepreferential issue other than thosepreferential issue other than thosepreferential issue other than those
preferential issues to which the provisions ofpreferential issues to which the provisions ofpreferential issues to which the provisions ofpreferential issues to which the provisions of
chapter VII of the Securities and Exchangechapter VII of the Securities and Exchangechapter VII of the Securities and Exchangechapter VII of the Securities and Exchange
Board of India (Issue of Capital andBoard of India (Issue of Capital andBoard of India (Issue of Capital andBoard of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009Disclosure Requirements) Regulations, 2009Disclosure Requirements) Regulations, 2009Disclosure Requirements) Regulations, 2009
does not apply;does not apply;does not apply;does not apply;
CA. Pramod Jain

OTHERSOTHERSOTHERSOTHERS
• Year of holding of immovable property for LT isYear of holding of immovable property for LT isYear of holding of immovable property for LT isYear of holding of immovable property for LT is
2 years. But not for 54 / 54F benefits.2 years. But not for 54 / 54F benefits.2 years. But not for 54 / 54F benefits.2 years. But not for 54 / 54F benefits.
• Compute GTI of Mr. P having following incomesCompute GTI of Mr. P having following incomesCompute GTI of Mr. P having following incomesCompute GTI of Mr. P having following incomes
for FY 2017for FY 2017for FY 2017for FY 2017----18:18:18:18:
• SalarySalarySalarySalary RsRsRsRs. 12 Lakhs. 12 Lakhs. 12 Lakhs. 12 Lakhs
• RentRentRentRent RsRsRsRs. 9 lacs less 30% = 6.30 Lakhs. 9 lacs less 30% = 6.30 Lakhs. 9 lacs less 30% = 6.30 Lakhs. 9 lacs less 30% = 6.30 Lakhs
• Interest paid on rented PropertyInterest paid on rented PropertyInterest paid on rented PropertyInterest paid on rented Property RsRsRsRs. 15 L. 15 L. 15 L. 15 L
• RsRsRsRs. 10 Lakhs [(12. 10 Lakhs [(12. 10 Lakhs [(12. 10 Lakhs [(12----2), carried forward HP loss2), carried forward HP loss2), carried forward HP loss2), carried forward HP loss RsRsRsRs. 6.7 L]. 6.7 L]. 6.7 L]. 6.7 L]
CA. Pramod Jain

ACCOUNTING STANDARDSACCOUNTING STANDARDSACCOUNTING STANDARDSACCOUNTING STANDARDS
CA. Pramod Jain

AMENDEDAMENDEDAMENDEDAMENDED W.E.FW.E.FW.E.FW.E.F. 30. 30. 30. 30THTHTHTH MARCH 2016MARCH 2016MARCH 2016MARCH 2016
ASASASAS 2 (Valuation of Inventories )2 (Valuation of Inventories )2 (Valuation of Inventories )2 (Valuation of Inventories )
AS 4 (Contingencies and Events OccurringAS 4 (Contingencies and Events OccurringAS 4 (Contingencies and Events OccurringAS 4 (Contingencies and Events Occurring afterafterafterafter thethethethe
Balance Sheet Date)Balance Sheet Date)Balance Sheet Date)Balance Sheet Date)
AS 6 (Depreciation Accounting requirements forAS 6 (Depreciation Accounting requirements forAS 6 (Depreciation Accounting requirements forAS 6 (Depreciation Accounting requirements for
depreciation are now incorporated in revised AS 10)depreciation are now incorporated in revised AS 10)depreciation are now incorporated in revised AS 10)depreciation are now incorporated in revised AS 10)
As 10 (Property, Plant and Equipment)As 10 (Property, Plant and Equipment)As 10 (Property, Plant and Equipment)As 10 (Property, Plant and Equipment)
AS 13 (Accounting for Investments)AS 13 (Accounting for Investments)AS 13 (Accounting for Investments)AS 13 (Accounting for Investments)
AS 14 (Accounting for Amalgamation)AS 14 (Accounting for Amalgamation)AS 14 (Accounting for Amalgamation)AS 14 (Accounting for Amalgamation)
AS 21 (Consolidated Financial Statements)AS 21 (Consolidated Financial Statements)AS 21 (Consolidated Financial Statements)AS 21 (Consolidated Financial Statements)
AS 29 (Provisions, Contingent Liabilities and ContingentAS 29 (Provisions, Contingent Liabilities and ContingentAS 29 (Provisions, Contingent Liabilities and ContingentAS 29 (Provisions, Contingent Liabilities and Contingent
Assets)Assets)Assets)Assets)
CA. Pramod Jain

AS 6 & AS 10AS 6 & AS 10AS 6 & AS 10AS 6 & AS 10
AS 6 omittedAS 6 omittedAS 6 omittedAS 6 omitted
AS 10AS 10AS 10AS 10 –––– Property Plant & EquipmentProperty Plant & EquipmentProperty Plant & EquipmentProperty Plant & Equipment
Its now only for tangible itemsIts now only for tangible itemsIts now only for tangible itemsIts now only for tangible items
It now includes bearer plants, biological assets tooIt now includes bearer plants, biological assets tooIt now includes bearer plants, biological assets tooIt now includes bearer plants, biological assets too
Provides for recognizing & derecognizing costs ofProvides for recognizing & derecognizing costs ofProvides for recognizing & derecognizing costs ofProvides for recognizing & derecognizing costs of
replacement of:replacement of:replacement of:replacement of:
PartsPartsPartsParts
Major inspection costsMajor inspection costsMajor inspection costsMajor inspection costs
Capitalization of decommissioning, restoration &Capitalization of decommissioning, restoration &Capitalization of decommissioning, restoration &Capitalization of decommissioning, restoration &
similarsimilarsimilarsimilar liabilitiesliabilitiesliabilitiesliabilities –––– other than for items used forother than for items used forother than for items used forother than for items used for
producing inventoriesproducing inventoriesproducing inventoriesproducing inventories
CA. Pramod Jain

AS 10AS 10AS 10AS 10
Initial cost to include testing costs after deducting netInitial cost to include testing costs after deducting netInitial cost to include testing costs after deducting netInitial cost to include testing costs after deducting net
proceeds from selling any items produced duringproceeds from selling any items produced duringproceeds from selling any items produced duringproceeds from selling any items produced during
testingtestingtestingtesting
If deferred paymentsIf deferred paymentsIf deferred paymentsIf deferred payments –––– interest subject to AS 16interest subject to AS 16interest subject to AS 16interest subject to AS 16
Revaluation model or Cost modelRevaluation model or Cost modelRevaluation model or Cost modelRevaluation model or Cost model
Revaluation of entire class not specific assetRevaluation of entire class not specific assetRevaluation of entire class not specific assetRevaluation of entire class not specific asset
Investment Property in AS 13 only at Cost ModelInvestment Property in AS 13 only at Cost ModelInvestment Property in AS 13 only at Cost ModelInvestment Property in AS 13 only at Cost Model
ComponentComponentComponentComponent accountingaccountingaccountingaccounting
Change in depreciation is now accounting estimateChange in depreciation is now accounting estimateChange in depreciation is now accounting estimateChange in depreciation is now accounting estimate
No gross block / net block but nowNo gross block / net block but nowNo gross block / net block but nowNo gross block / net block but now –––– carryingcarryingcarryingcarrying
amountsamountsamountsamounts
Enhanced disclosuresEnhanced disclosuresEnhanced disclosuresEnhanced disclosures –––– restrictions, pledge on PPErestrictions, pledge on PPErestrictions, pledge on PPErestrictions, pledge on PPE
CA. Pramod Jain

OTHER IMPORTANT AMENDMENTSOTHER IMPORTANT AMENDMENTSOTHER IMPORTANT AMENDMENTSOTHER IMPORTANT AMENDMENTS
AS 2AS 2AS 2AS 2 –––– Machinery Spares which can be used onlyMachinery Spares which can be used onlyMachinery Spares which can be used onlyMachinery Spares which can be used only
with item of a fixed asset were FA if its use iswith item of a fixed asset were FA if its use iswith item of a fixed asset were FA if its use iswith item of a fixed asset were FA if its use is
irregular. Now spare parts, servicing equipmentirregular. Now spare parts, servicing equipmentirregular. Now spare parts, servicing equipmentirregular. Now spare parts, servicing equipment
and standby equipment to be FA only as per ASand standby equipment to be FA only as per ASand standby equipment to be FA only as per ASand standby equipment to be FA only as per AS
10 (PPE)10 (PPE)10 (PPE)10 (PPE) –––– 12 month12 month12 month12 month
AS 4AS 4AS 4AS 4 –––– no provision for proposed dividends nowno provision for proposed dividends nowno provision for proposed dividends nowno provision for proposed dividends now
AS 13AS 13AS 13AS 13 –––– Investment property at cost modelInvestment property at cost modelInvestment property at cost modelInvestment property at cost model ---- ASASASAS
10 less depreciation and any impairment costs10 less depreciation and any impairment costs10 less depreciation and any impairment costs10 less depreciation and any impairment costs
AS 14AS 14AS 14AS 14 –––– AmalgamationAmalgamationAmalgamationAmalgamation ---- Limited revision toLimited revision toLimited revision toLimited revision to
include reference to Companies Act,include reference to Companies Act,include reference to Companies Act,include reference to Companies Act, 2013201320132013
CA. Pramod Jain

OTHER IMPORTANT AMENDMENTSOTHER IMPORTANT AMENDMENTSOTHER IMPORTANT AMENDMENTSOTHER IMPORTANT AMENDMENTS
ASASASAS 21212121 ---- Where no subsidiary but an associate /Where no subsidiary but an associate /Where no subsidiary but an associate /Where no subsidiary but an associate /
JV, to prepare CFS as per applicable ASJV, to prepare CFS as per applicable ASJV, to prepare CFS as per applicable ASJV, to prepare CFS as per applicable AS
AS 29AS 29AS 29AS 29 ---- Discounting of decommissioning,Discounting of decommissioning,Discounting of decommissioning,Discounting of decommissioning,
restorationrestorationrestorationrestoration & similar liabilities& similar liabilities& similar liabilities& similar liabilities as per AS 10 atas per AS 10 atas per AS 10 atas per AS 10 at
prepreprepre----tax rate that reflect the current markettax rate that reflect the current markettax rate that reflect the current markettax rate that reflect the current market
assessment of time value of money & and theassessment of time value of money & and theassessment of time value of money & and theassessment of time value of money & and the
risks specific to the liabilityrisks specific to the liabilityrisks specific to the liabilityrisks specific to the liability
CA. Pramod Jain

From FY
2015-16
• Any company
voluntaryvoluntaryvoluntaryvoluntary
From FY
2016-17
• All companies
having net worth of
rupees 500 crore orrupees 500 crore orrupees 500 crore orrupees 500 crore or
more.more.more.more.
• Holding, subsidiary,
joint venture or
associate
companies of above
companies.
From FY
2017-18
• Cos. whose equity or
debt securities are listedlistedlistedlisted
or are in the processor are in the processor are in the processor are in the process of
being listed on any stock
exchange in India or
outside India and having
net worth of <<<< RsRsRsRs. 500. 500. 500. 500
crore.crore.crore.crore.
• Unlisted companiesUnlisted companiesUnlisted companiesUnlisted companies
having net worth of Rs.
250 crores or more250 crores or more250 crores or more250 crores or more butbutbutbut
less thanless thanless thanless than RsRsRsRs. 500 crore.. 500 crore.. 500 crore.. 500 crore.
• Holding, subsidiary, joint
venture or associate
companies of above
companies.
INDINDINDIND ASASASAS –––– ROADMAP FOR OTHER THANROADMAP FOR OTHER THANROADMAP FOR OTHER THANROADMAP FOR OTHER THAN
NBFCNBFCNBFCNBFC & INSURANCE COS.& INSURANCE COS.& INSURANCE COS.& INSURANCE COS.
CA. Pramod Jain

PRESUMPTIVE TAXATIONPRESUMPTIVE TAXATIONPRESUMPTIVE TAXATIONPRESUMPTIVE TAXATION
•PGBP other thanPGBP other thanPGBP other thanPGBP other than
professionals and agentsprofessionals and agentsprofessionals and agentsprofessionals and agents44AD44AD44AD44AD
•ProfessionalsProfessionalsProfessionalsProfessionals44ADA44ADA44ADA44ADA
•Goods CarriagesGoods CarriagesGoods CarriagesGoods Carriages44AE44AE44AE44AE
CA. Pramod Jain

PRESUMPTIVE TAXATIONPRESUMPTIVE TAXATIONPRESUMPTIVE TAXATIONPRESUMPTIVE TAXATION
• Section 44ADSection 44ADSection 44ADSection 44AD
• If incomeIf incomeIf incomeIf income CLAIMEDCLAIMEDCLAIMEDCLAIMED ---- Presumptive then:Presumptive then:Presumptive then:Presumptive then:
• No books of accounts u/s 44AANo books of accounts u/s 44AANo books of accounts u/s 44AANo books of accounts u/s 44AA
• No audit u/s 44ABNo audit u/s 44ABNo audit u/s 44ABNo audit u/s 44AB
• Deemed income of 8% and aboveDeemed income of 8% and aboveDeemed income of 8% and aboveDeemed income of 8% and above
• 6% if receipts by banking / digital6% if receipts by banking / digital6% if receipts by banking / digital6% if receipts by banking / digital
channel (to be proposed in Finance Billchannel (to be proposed in Finance Billchannel (to be proposed in Finance Billchannel (to be proposed in Finance Bill
2017 for FY 20162017 for FY 20162017 for FY 20162017 for FY 2016----17)17)17)17)
• All deductions u/s 30 to 38 deemed toAll deductions u/s 30 to 38 deemed toAll deductions u/s 30 to 38 deemed toAll deductions u/s 30 to 38 deemed to
have been given full effect.have been given full effect.have been given full effect.have been given full effect.
CA. Pramod Jain

PRESUMPTIVE TAXATIONPRESUMPTIVE TAXATIONPRESUMPTIVE TAXATIONPRESUMPTIVE TAXATION ---- CHANGESCHANGESCHANGESCHANGES
• Limit u/s 44AD increased from 1 Cr to 2 CrLimit u/s 44AD increased from 1 Cr to 2 CrLimit u/s 44AD increased from 1 Cr to 2 CrLimit u/s 44AD increased from 1 Cr to 2 Cr
• S. 44ADA introduced for ProfessionalsS. 44ADA introduced for ProfessionalsS. 44ADA introduced for ProfessionalsS. 44ADA introduced for Professionals –––– LimitLimitLimitLimit
50 Lacs50 Lacs50 Lacs50 Lacs –––– Deemed IncomeDeemed IncomeDeemed IncomeDeemed Income ----50%50%50%50%
• For firmsFor firmsFor firmsFor firms ---- partners salary & interest notpartners salary & interest notpartners salary & interest notpartners salary & interest not
allowable for business as well as professionalallowable for business as well as professionalallowable for business as well as professionalallowable for business as well as professional
• If benefit u/s 44AD not claimed in 1 year thenIf benefit u/s 44AD not claimed in 1 year thenIf benefit u/s 44AD not claimed in 1 year thenIf benefit u/s 44AD not claimed in 1 year then
cannot claim in next 5 years. In such case tocannot claim in next 5 years. In such case tocannot claim in next 5 years. In such case tocannot claim in next 5 years. In such case to
maintain books if income > maximum amountmaintain books if income > maximum amountmaintain books if income > maximum amountmaintain books if income > maximum amount
not chargeable to tax and audit u/s 44ABnot chargeable to tax and audit u/s 44ABnot chargeable to tax and audit u/s 44ABnot chargeable to tax and audit u/s 44AB
• No similar clause for professionals u/s 44ADANo similar clause for professionals u/s 44ADANo similar clause for professionals u/s 44ADANo similar clause for professionals u/s 44ADA
• Advance Tax for 44AD /44ADAAdvance Tax for 44AD /44ADAAdvance Tax for 44AD /44ADAAdvance Tax for 44AD /44ADA–––– 15151515thththth MarchMarchMarchMarch
CA. Pramod Jain

APPLICABILITY OF 44AD(44ADA) /44ABAPPLICABILITY OF 44AD(44ADA) /44ABAPPLICABILITY OF 44AD(44ADA) /44ABAPPLICABILITY OF 44AD(44ADA) /44AB ---- AY 2017AY 2017AY 2017AY 2017----18181818
• ADADADAD ---- NoNoNoNo
• ABABABAB ---- YesYesYesYes
Mfg.Mfg.Mfg.Mfg. ---- TurnoverTurnoverTurnoverTurnover –––– 120L; NP120L; NP120L; NP120L; NP –––– 10 L; 8010 L; 8010 L; 8010 L; 80----IAIAIAIA –––– 7 L;7 L;7 L;7 L;
TITITITI----2.40L2.40L2.40L2.40L
• ADADADAD –––– NoNoNoNo
• ADAADAADAADA ---- NoNoNoNo
TradingTradingTradingTrading---- TurnoverTurnoverTurnoverTurnover –––– 90L; NP90L; NP90L; NP90L; NP ----3L; Architect3L; Architect3L; Architect3L; Architect ––––
FeeFeeFeeFee –––– 55 L; NP55 L; NP55 L; NP55 L; NP---- 15 L; TI15 L; TI15 L; TI15 L; TI----7L7L7L7L
• ADADADAD –––– NoNoNoNo
• ADAADAADAADA ---- YesYesYesYes
DoctorDoctorDoctorDoctor –––– Trading TurnoverTrading TurnoverTrading TurnoverTrading Turnover –––– 120L120L120L120L ---- NPNPNPNP –––– 8 L;8 L;8 L;8 L;
FeeFeeFeeFee –––– 27 L27 L27 L27 L –––– NP 15 L; TINP 15 L; TINP 15 L; TINP 15 L; TI---- 20 L20 L20 L20 L
• ADADADAD ---- NoNoNoNo
Trading; TurnoverTrading; TurnoverTrading; TurnoverTrading; Turnover ----120L; Commission120L; Commission120L; Commission120L; Commission ---- 2L; NP2L; NP2L; NP2L; NP----
5L; TI 4L5L; TI 4L5L; TI 4L5L; TI 4L
CA. Pramod Jain

APPLICABILITY OF 44AD / 44AB ON MR. AAPPLICABILITY OF 44AD / 44AB ON MR. AAPPLICABILITY OF 44AD / 44AB ON MR. AAPPLICABILITY OF 44AD / 44AB ON MR. A
•Y/N
AY 2017AY 2017AY 2017AY 2017----18181818 –––– TTTT –––– RsRsRsRs. 120 Lacs . P. 120 Lacs . P. 120 Lacs . P. 120 Lacs . P
–––– 10 L, TI10 L, TI10 L, TI10 L, TI –––– 9 L9 L9 L9 L
•N/Y
AY 2018AY 2018AY 2018AY 2018----19191919 –––– TTTT –––– RsRsRsRs. 120 Lacs . P. 120 Lacs . P. 120 Lacs . P. 120 Lacs . P
–––– 8 L, TI8 L, TI8 L, TI8 L, TI –––– 6 L6 L6 L6 L
•N/Y
AY 2019AY 2019AY 2019AY 2019----20202020 –––– TTTT –––– RsRsRsRs. 70 Lacs . P. 70 Lacs . P. 70 Lacs . P. 70 Lacs . P ––––
10 L, TI10 L, TI10 L, TI10 L, TI –––– 9 L9 L9 L9 L
•N/N
AY 2020AY 2020AY 2020AY 2020----21212121 –––– TTTT –––– RsRsRsRs. 60 Lacs . P. 60 Lacs . P. 60 Lacs . P. 60 Lacs . P ––––
10 L, TI10 L, TI10 L, TI10 L, TI –––– 2 L2 L2 L2 L
CA. Pramod Jain

SECTION 44AD ESSENTIALSSECTION 44AD ESSENTIALSSECTION 44AD ESSENTIALSSECTION 44AD ESSENTIALS
• Should be eligibleShould be eligibleShould be eligibleShould be eligible assesseeassesseeassesseeassessee
• Ind., HUF, Firm (except LLP); andInd., HUF, Firm (except LLP); andInd., HUF, Firm (except LLP); andInd., HUF, Firm (except LLP); and
• No s. 10A, 10AA, 10B, 10BA &No s. 10A, 10AA, 10B, 10BA &No s. 10A, 10AA, 10B, 10BA &No s. 10A, 10AA, 10B, 10BA & ChpChpChpChp VIA Part CVIA Part CVIA Part CVIA Part C
• Should be doing eligible businessShould be doing eligible businessShould be doing eligible businessShould be doing eligible business
• Any except 44AE; andAny except 44AE; andAny except 44AE; andAny except 44AE; and
• Turnover < 2Turnover < 2Turnover < 2Turnover < 2 CrsCrsCrsCrs
• Section not applicable to a person carrying:Section not applicable to a person carrying:Section not applicable to a person carrying:Section not applicable to a person carrying:
• ProfessionProfessionProfessionProfession
• Commission or brokerageCommission or brokerageCommission or brokerageCommission or brokerage
• Agency businessAgency businessAgency businessAgency business
• Deemed profit 8% or moreDeemed profit 8% or moreDeemed profit 8% or moreDeemed profit 8% or more
• Commensurate with bank account !!!Commensurate with bank account !!!Commensurate with bank account !!!Commensurate with bank account !!!
CA. Pramod Jain

SECTION 44ADA ESSENTIALSSECTION 44ADA ESSENTIALSSECTION 44ADA ESSENTIALSSECTION 44ADA ESSENTIALS
• Should be engaged in professionShould be engaged in professionShould be engaged in professionShould be engaged in profession
–––– section 44AA read with rule 6Fsection 44AA read with rule 6Fsection 44AA read with rule 6Fsection 44AA read with rule 6F
• Gross receipt < 50 LakhsGross receipt < 50 LakhsGross receipt < 50 LakhsGross receipt < 50 Lakhs
• Deemed profit 50% or moreDeemed profit 50% or moreDeemed profit 50% or moreDeemed profit 50% or more
• Commensurate with bankCommensurate with bankCommensurate with bankCommensurate with bank
account !!!account !!!account !!!account !!!
CA. Pramod Jain

PROFESSIONPROFESSIONPROFESSIONPROFESSION
• Section 44AA read with Rule 6FSection 44AA read with Rule 6FSection 44AA read with Rule 6FSection 44AA read with Rule 6F
• AccountancyAccountancyAccountancyAccountancy
• ArchitecturalArchitecturalArchitecturalArchitectural
• Authorised RepresentativeAuthorised RepresentativeAuthorised RepresentativeAuthorised Representative
• Company SecretaryCompany SecretaryCompany SecretaryCompany Secretary
• EngineeringEngineeringEngineeringEngineering
• Film Artist, actors, cameramen, editor……Film Artist, actors, cameramen, editor……Film Artist, actors, cameramen, editor……Film Artist, actors, cameramen, editor……
• Interior DecorationInterior DecorationInterior DecorationInterior Decoration
• LegalLegalLegalLegal
• MedicalMedicalMedicalMedical
• Technical ConsultancyTechnical ConsultancyTechnical ConsultancyTechnical Consultancy
• Information TechnologyInformation TechnologyInformation TechnologyInformation Technology
CA. Pramod Jain

PROFESSIONPROFESSIONPROFESSIONPROFESSION
• Held as businessHeld as businessHeld as businessHeld as business
• Advertising agentAdvertising agentAdvertising agentAdvertising agent
• Clearing, forwarding & shipping agentsClearing, forwarding & shipping agentsClearing, forwarding & shipping agentsClearing, forwarding & shipping agents
• Insurance agentsInsurance agentsInsurance agentsInsurance agents
• Travel agentTravel agentTravel agentTravel agent
• Stock and share brokingStock and share brokingStock and share brokingStock and share broking
• Courier agencyCourier agencyCourier agencyCourier agency
• Nursing HomeNursing HomeNursing HomeNursing Home
• Are they hence covered u/s 44AD??Are they hence covered u/s 44AD??Are they hence covered u/s 44AD??Are they hence covered u/s 44AD??
CA. Pramod Jain

DEMONETIZATION REPORTINGDEMONETIZATION REPORTINGDEMONETIZATION REPORTINGDEMONETIZATION REPORTING
• AllAllAllAll ---- ITRsITRsITRsITRs
• Along with Bank DetailsAlong with Bank DetailsAlong with Bank DetailsAlong with Bank Details –––– CashCashCashCash
depositeddepositeddepositeddeposited RsRsRsRs. 2 Lakhs and. 2 Lakhs and. 2 Lakhs and. 2 Lakhs and
aboveaboveaboveabove
• Schedule IIISchedule IIISchedule IIISchedule III
• Auditors’ ReportAuditors’ ReportAuditors’ ReportAuditors’ Report
CA. Pramod Jain

SCHEDULE IIISCHEDULE IIISCHEDULE IIISCHEDULE III
AmendedAmendedAmendedAmended wwww....eeee....ffff.... 30303030thththth MarchMarchMarchMarch 2017201720172017....
EveryEveryEveryEvery companycompanycompanycompany totototo disclosedisclosedisclosedisclose detailsdetailsdetailsdetails ofofofof SBNSBNSBNSBN
heldheldheldheld &&&& transactedtransactedtransactedtransacted duringduringduringduring 8888////11111111////2016201620162016 totototo
30303030////12121212////2016201620162016 ....
SBNsSBNsSBNsSBNs OtherOtherOtherOther
denominadenominadenominadenomina
tion notestion notestion notestion notes
TotalTotalTotalTotal
Closing cash in hand as on 8.11.2016Closing cash in hand as on 8.11.2016Closing cash in hand as on 8.11.2016Closing cash in hand as on 8.11.2016
(+) Permitted receipts(+) Permitted receipts(+) Permitted receipts(+) Permitted receipts
((((----) Permitted payments) Permitted payments) Permitted payments) Permitted payments
((((----) Amount deposited in Banks) Amount deposited in Banks) Amount deposited in Banks) Amount deposited in Banks
Closing cash in hand as onClosing cash in hand as onClosing cash in hand as onClosing cash in hand as on 30.12.201630.12.201630.12.201630.12.2016
CA. Pramod Jain

AUDITOR’S REPORTAUDITOR’S REPORTAUDITOR’S REPORTAUDITOR’S REPORT
WWWWhetherhetherhetherhether thethethethe companycompanycompanycompany hadhadhadhad providedprovidedprovidedprovided
requisiterequisiterequisiterequisite disclosuresdisclosuresdisclosuresdisclosures inininin itsitsitsits financialfinancialfinancialfinancial
statementsstatementsstatementsstatements asasasas totototo holdingsholdingsholdingsholdings asasasas wellwellwellwell asasasas
dealingsdealingsdealingsdealings inininin SpecifiedSpecifiedSpecifiedSpecified BankBankBankBank NotesNotesNotesNotes duringduringduringduring
thethethethe periodperiodperiodperiod fromfromfromfrom 8888 NovemberNovemberNovemberNovember 2016201620162016 totototo 30303030
DecemberDecemberDecemberDecember 2016201620162016
AAAAndndndnd ifififif sosososo
WhetherWhetherWhetherWhether thesethesethesethese areareareare inininin accordanceaccordanceaccordanceaccordance withwithwithwith
thethethethe booksbooksbooksbooks ofofofof accountsaccountsaccountsaccounts maintainedmaintainedmaintainedmaintained bybybyby thethethethe
companycompanycompanycompany....
CA. Pramod Jain

ICAIICAIICAIICAI IMPLEMENTATION GUIDEIMPLEMENTATION GUIDEIMPLEMENTATION GUIDEIMPLEMENTATION GUIDE
ICAI implementation Guide forICAI implementation Guide forICAI implementation Guide forICAI implementation Guide for
amendment to Auditor Report & Scheduleamendment to Auditor Report & Scheduleamendment to Auditor Report & Scheduleamendment to Auditor Report & Schedule
III issued onIII issued onIII issued onIII issued on 15th April 201715th April 201715th April 201715th April 2017
Disclosure shouldDisclosure shouldDisclosure shouldDisclosure should be mentioned in termsbe mentioned in termsbe mentioned in termsbe mentioned in terms
of INR, thus there is no specificof INR, thus there is no specificof INR, thus there is no specificof INR, thus there is no specific
requirement to mention the denominationrequirement to mention the denominationrequirement to mention the denominationrequirement to mention the denomination
also in which closing cash balance duringalso in which closing cash balance duringalso in which closing cash balance duringalso in which closing cash balance during
the specified period was heldthe specified period was heldthe specified period was heldthe specified period was held
Auditors also to report for all reportsAuditors also to report for all reportsAuditors also to report for all reportsAuditors also to report for all reports
issued after 30issued after 30issued after 30issued after 30thththth March 2017March 2017March 2017March 2017
CA. Pramod Jain

WHAT TO DOWHAT TO DOWHAT TO DOWHAT TO DO
Obtain cash book and bank statements forObtain cash book and bank statements forObtain cash book and bank statements forObtain cash book and bank statements for
demonetization perioddemonetization perioddemonetization perioddemonetization period –––– keep a signedkeep a signedkeep a signedkeep a signed
copy in audit documents, wherever feasiblecopy in audit documents, wherever feasiblecopy in audit documents, wherever feasiblecopy in audit documents, wherever feasible
Perform audit proceduresPerform audit proceduresPerform audit proceduresPerform audit procedures
Verifying permitted SBN transactionsVerifying permitted SBN transactionsVerifying permitted SBN transactionsVerifying permitted SBN transactions
Obtain information as per ICAIObtain information as per ICAIObtain information as per ICAIObtain information as per ICAI
implementation guideimplementation guideimplementation guideimplementation guide
Obtain due MRObtain due MRObtain due MRObtain due MR
Issue report accordinglyIssue report accordinglyIssue report accordinglyIssue report accordingly
CA. Pramod Jain

ILLUSTRATIVE PROCEDUREILLUSTRATIVE PROCEDUREILLUSTRATIVE PROCEDUREILLUSTRATIVE PROCEDURE ---- ICAIICAIICAIICAI
Obtain cash balance certificates withObtain cash balance certificates withObtain cash balance certificates withObtain cash balance certificates with
denominations as on 8.11.2016 & 30.12.2016denominations as on 8.11.2016 & 30.12.2016denominations as on 8.11.2016 & 30.12.2016denominations as on 8.11.2016 & 30.12.2016
Obtain an understanding of the controlsObtain an understanding of the controlsObtain an understanding of the controlsObtain an understanding of the controls &&&&
procedures implementedprocedures implementedprocedures implementedprocedures implemented bybybyby company during thecompany during thecompany during thecompany during the
periodperiodperiodperiod 9.11.9.11.9.11.9.11. 2016 to as at2016 to as at2016 to as at2016 to as at 30.12.201630.12.201630.12.201630.12.2016 totototo
ensure that there were no payments andensure that there were no payments andensure that there were no payments andensure that there were no payments and
receipts made in SBN other than thosereceipts made in SBN other than thosereceipts made in SBN other than thosereceipts made in SBN other than those
permitted by regulators from time to time.permitted by regulators from time to time.permitted by regulators from time to time.permitted by regulators from time to time.
WhetherWhetherWhetherWhether the controls (if implemented by thethe controls (if implemented by thethe controls (if implemented by thethe controls (if implemented by the
company) were reasonable to prevent andcompany) were reasonable to prevent andcompany) were reasonable to prevent andcompany) were reasonable to prevent and
detect any nondetect any nondetect any nondetect any non----permitted transactionspermitted transactionspermitted transactionspermitted transactions
CA. Pramod Jain

Confirm the balances as certified by theConfirm the balances as certified by theConfirm the balances as certified by theConfirm the balances as certified by the
management from the books of accounts as atmanagement from the books of accounts as atmanagement from the books of accounts as atmanagement from the books of accounts as at
those datesthose datesthose datesthose dates
In case the auditor had conducted physical cashIn case the auditor had conducted physical cashIn case the auditor had conducted physical cashIn case the auditor had conducted physical cash
counts oncounts oncounts oncounts on 8.11.20168.11.20168.11.20168.11.2016 andandandand 30.12.201630.12.201630.12.201630.12.2016 or aor aor aor a
closer date before or after that date (forcloser date before or after that date (forcloser date before or after that date (forcloser date before or after that date (for
exampleexampleexampleexample 31.12.201631.12.201631.12.201631.12.2016), he should consider), he should consider), he should consider), he should consider
performing rollperforming rollperforming rollperforming roll----forward or rollforward or rollforward or rollforward or roll----back proceduresback proceduresback proceduresback procedures
to confirm the balance as certified by theto confirm the balance as certified by theto confirm the balance as certified by theto confirm the balance as certified by the
management has been arrived at correctlymanagement has been arrived at correctlymanagement has been arrived at correctlymanagement has been arrived at correctly
CA. Pramod Jain

Obtain a listing fromObtain a listing fromObtain a listing fromObtain a listing from managementmanagementmanagementmanagement as to howas to howas to howas to how
SBNsSBNsSBNsSBNs available withavailable withavailable withavailable with them as on 8.11.2016 werethem as on 8.11.2016 werethem as on 8.11.2016 werethem as on 8.11.2016 were
dealt with, example.dealt with, example.dealt with, example.dealt with, example.
UsedUsedUsedUsed for payment for permittedfor payment for permittedfor payment for permittedfor payment for permitted transactions.transactions.transactions.transactions.
Deposited in bank accounts (with datesDeposited in bank accounts (with datesDeposited in bank accounts (with datesDeposited in bank accounts (with dates &&&& amount,amount,amount,amount,
with denominationswith denominationswith denominationswith denominations).).).).
UsedUsedUsedUsed for Payment for nonfor Payment for nonfor Payment for nonfor Payment for non----permitted transactionspermitted transactionspermitted transactionspermitted transactions
SBNsSBNsSBNsSBNs as available with the company as at closingas available with the company as at closingas available with the company as at closingas available with the company as at closing
hours of 30 December, 2016.hours of 30 December, 2016.hours of 30 December, 2016.hours of 30 December, 2016.
CA. Pramod Jain

Obtain a listingObtain a listingObtain a listingObtain a listing fromfromfromfrom management if there weremanagement if there weremanagement if there weremanagement if there were
any receipts of the SBNs during the period fromany receipts of the SBNs during the period fromany receipts of the SBNs during the period fromany receipts of the SBNs during the period from
9.11.20169.11.20169.11.20169.11.2016 totototo 30.12.201630.12.201630.12.201630.12.2016, including the nature, including the nature, including the nature, including the nature
of transaction and amount with denominations.of transaction and amount with denominations.of transaction and amount with denominations.of transaction and amount with denominations.
Further examine with the relevant notificationFurther examine with the relevant notificationFurther examine with the relevant notificationFurther examine with the relevant notification
that they were eligible to accept SBNsthat they were eligible to accept SBNsthat they were eligible to accept SBNsthat they were eligible to accept SBNs
Obtain a reconciliation of the cash balance fromObtain a reconciliation of the cash balance fromObtain a reconciliation of the cash balance fromObtain a reconciliation of the cash balance from
the management.the management.the management.the management. TheTheTheThe figures required to befigures required to befigures required to befigures required to be
disclosed in Schedule III in INR, but for auditorsdisclosed in Schedule III in INR, but for auditorsdisclosed in Schedule III in INR, but for auditorsdisclosed in Schedule III in INR, but for auditors
working and reconciliation, obtain the figuresworking and reconciliation, obtain the figuresworking and reconciliation, obtain the figuresworking and reconciliation, obtain the figures
with denominationwith denominationwith denominationwith denomination
CA. Pramod Jain

SBNsSBNsSBNsSBNs Other DenominationOther DenominationOther DenominationOther Denomination
NotesNotesNotesNotes
DenomDenomDenomDenom
inationinationinationination
AmoAmoAmoAmo
untuntuntunt
DenominatiDenominatiDenominatiDenominati
onononon
AmountAmountAmountAmount DenomiDenomiDenomiDenomi
nationnationnationnation
AmoAmoAmoAmo
untuntuntunt
Closing Balance as onClosing Balance as onClosing Balance as onClosing Balance as on
8.11.20168.11.20168.11.20168.11.2016
Add: Withdrawal from bankAdd: Withdrawal from bankAdd: Withdrawal from bankAdd: Withdrawal from bank NANANANA NilNilNilNil
Add: Receipts for permittedAdd: Receipts for permittedAdd: Receipts for permittedAdd: Receipts for permitted
transactionstransactionstransactionstransactions
Add: Receipts for nonAdd: Receipts for nonAdd: Receipts for nonAdd: Receipts for non----
permitted transactionspermitted transactionspermitted transactionspermitted transactions
Less: Paid for permittedLess: Paid for permittedLess: Paid for permittedLess: Paid for permitted
Less: Paid for nonLess: Paid for nonLess: Paid for nonLess: Paid for non----permittedpermittedpermittedpermitted
Less: Deposited in BankLess: Deposited in BankLess: Deposited in BankLess: Deposited in Bank
Closing Balance as onClosing Balance as onClosing Balance as onClosing Balance as on
30.12.201630.12.201630.12.201630.12.2016
CA. Pramod Jain

For the details of payments given by theFor the details of payments given by theFor the details of payments given by theFor the details of payments given by the
company, verify the following with reference tocompany, verify the following with reference tocompany, verify the following with reference tocompany, verify the following with reference to
relevant notifications issued from time to time :relevant notifications issued from time to time :relevant notifications issued from time to time :relevant notifications issued from time to time :
PaymentsPaymentsPaymentsPayments for permitted transactions:for permitted transactions:for permitted transactions:for permitted transactions:
VerifyVerifyVerifyVerify cash payment vouchers andcash payment vouchers andcash payment vouchers andcash payment vouchers and
WhetherWhetherWhetherWhether the purpose for which payments were made arethe purpose for which payments were made arethe purpose for which payments were made arethe purpose for which payments were made are
covered under permitted/ noncovered under permitted/ noncovered under permitted/ noncovered under permitted/ non----permitted transactionspermitted transactionspermitted transactionspermitted transactions
DepositedDepositedDepositedDeposited in bank accounts (with dates and amount,in bank accounts (with dates and amount,in bank accounts (with dates and amount,in bank accounts (with dates and amount,
with denominations):with denominations):with denominations):with denominations):
VerifyVerifyVerifyVerify deposit slips or deposit form which would containdeposit slips or deposit form which would containdeposit slips or deposit form which would containdeposit slips or deposit form which would contain
details of denominations and would also be acknowledgeddetails of denominations and would also be acknowledgeddetails of denominations and would also be acknowledgeddetails of denominations and would also be acknowledged
by the bank.by the bank.by the bank.by the bank.
CA. Pramod Jain

Obtain bank statement regarding depositsObtain bank statement regarding depositsObtain bank statement regarding depositsObtain bank statement regarding deposits
made with the banksmade with the banksmade with the banksmade with the banks
WhereWhereWhereWhere the entity is covered under the permittedthe entity is covered under the permittedthe entity is covered under the permittedthe entity is covered under the permitted
list to receive payments in SBN (e.g. hospital,list to receive payments in SBN (e.g. hospital,list to receive payments in SBN (e.g. hospital,list to receive payments in SBN (e.g. hospital,
tolltolltolltoll----collection companies, petrol pumps, aircollection companies, petrol pumps, aircollection companies, petrol pumps, aircollection companies, petrol pumps, air
ticket etcticket etcticket etcticket etc.),.),.),.), obtain details of receipts made byobtain details of receipts made byobtain details of receipts made byobtain details of receipts made by
the company and deposits made with the bank.the company and deposits made with the bank.the company and deposits made with the bank.the company and deposits made with the bank.
AlsoAlsoAlsoAlso verify the same from the books of accountsverify the same from the books of accountsverify the same from the books of accountsverify the same from the books of accounts
of the company, bank deposit slips and Bankof the company, bank deposit slips and Bankof the company, bank deposit slips and Bankof the company, bank deposit slips and Bank
Statements.Statements.Statements.Statements.
Obtain ManagementObtain ManagementObtain ManagementObtain Management RRRRepresentationepresentationepresentationepresentation
CA. Pramod Jain

SUGGESTED M. R.SUGGESTED M. R.SUGGESTED M. R.SUGGESTED M. R.
WeWeWeWe have appropriately disclosed {Refer Note [ ]},have appropriately disclosed {Refer Note [ ]},have appropriately disclosed {Refer Note [ ]},have appropriately disclosed {Refer Note [ ]},
the details of Specified Bank Notes (SBN) heldthe details of Specified Bank Notes (SBN) heldthe details of Specified Bank Notes (SBN) heldthe details of Specified Bank Notes (SBN) held
and transacted during the period fromand transacted during the period fromand transacted during the period fromand transacted during the period from
8.11.20168.11.20168.11.20168.11.2016 totototo 30.12.201630.12.201630.12.201630.12.2016 pursuant to thepursuant to thepursuant to thepursuant to the
requirement of Notification G.S.R 308(E) datedrequirement of Notification G.S.R 308(E) datedrequirement of Notification G.S.R 308(E) datedrequirement of Notification G.S.R 308(E) dated
30th March 2017.30th March 2017.30th March 2017.30th March 2017.
FurtherFurtherFurtherFurther we confirm that we have compliedwe confirm that we have compliedwe confirm that we have compliedwe confirm that we have complied withwithwithwith
all relevantall relevantall relevantall relevant guidelines / notificationsguidelines / notificationsguidelines / notificationsguidelines / notifications issued byissued byissued byissued by
RBIRBIRBIRBI from time to time in respect of holding andfrom time to time in respect of holding andfrom time to time in respect of holding andfrom time to time in respect of holding and
dealing withdealing withdealing withdealing with SBN,SBN,SBN,SBN, and that the company hadand that the company hadand that the company hadand that the company had
proper controls, system and procedures in placeproper controls, system and procedures in placeproper controls, system and procedures in placeproper controls, system and procedures in place
for such compliances.for such compliances.for such compliances.for such compliances.
CA. Pramod Jain

REPORTING FORMATSREPORTING FORMATSREPORTING FORMATSREPORTING FORMATS
CleanCleanCleanClean ReportReportReportReport::::
BasedBasedBasedBased onononon auditauditauditaudit proceduresproceduresproceduresprocedures andandandand relyingrelyingrelyingrelying onononon thethethethe
managementmanagementmanagementmanagement representationrepresentationrepresentationrepresentation wewewewe reportreportreportreport thatthatthatthat thethethethe
disclosuresdisclosuresdisclosuresdisclosures areareareare inininin accordanceaccordanceaccordanceaccordance withwithwithwith booksbooksbooksbooks ofofofof accountaccountaccountaccount
maintainedmaintainedmaintainedmaintained bybybyby thethethethe CompanyCompanyCompanyCompany andandandand asasasas producedproducedproducedproduced totototo usususus bybybyby thethethethe
ManagementManagementManagementManagement –––– ReferReferReferRefer NoteNoteNoteNote [*][*][*][*]
WhereWhereWhereWhere clauseclauseclauseclause notnotnotnot applicableapplicableapplicableapplicable::::
TheTheTheThe CompanyCompanyCompanyCompany diddiddiddid notnotnotnot havehavehavehave anyanyanyany holdingsholdingsholdingsholdings orororor dealingsdealingsdealingsdealings inininin
SpecifiedSpecifiedSpecifiedSpecified BankBankBankBank NotesNotesNotesNotes duringduringduringduring thethethethe periodperiodperiodperiod fromfromfromfrom 8888thththth
November,November,November,November, 2016201620162016 totototo 30303030thththth December,December,December,December, 2016201620162016 –––– ReferReferReferRefer NoteNoteNoteNote
[*][*][*][*]
TheTheTheThe disclosuredisclosuredisclosuredisclosure requirementrequirementrequirementrequirement asasasas envisagedenvisagedenvisagedenvisaged inininin NotificationNotificationNotificationNotification
GGGG....SSSS....RRRR 308308308308(E)(E)(E)(E) dateddateddateddated 30303030thththth MarchMarchMarchMarch 2017201720172017 isisisis notnotnotnot applicableapplicableapplicableapplicable totototo
thethethethe CompanyCompanyCompanyCompany ---- ReferReferReferRefer NoteNoteNoteNote [*][*][*][*]
CA. Pramod Jain

CompanyCompanyCompanyCompany providedprovidedprovidedprovided details,details,details,details, butbutbutbut auditorauditorauditorauditor couldcouldcouldcould notnotnotnot verifyverifyverifyverify
duedueduedue totototo nonnonnonnon----availabilityavailabilityavailabilityavailability ofofofof sufficientsufficientsufficientsufficient andandandand appropriateappropriateappropriateappropriate
auditauditauditaudit evidenceevidenceevidenceevidence resultingresultingresultingresulting intointointointo scopescopescopescope limitationlimitationlimitationlimitation
TheTheTheThe CompanyCompanyCompanyCompany hashashashas providedprovidedprovidedprovided requisiterequisiterequisiterequisite disclosuresdisclosuresdisclosuresdisclosures inininin thethethethe
financialfinancialfinancialfinancial statementsstatementsstatementsstatements asasasas totototo holdingsholdingsholdingsholdings asasasas wellwellwellwell asasasas dealingsdealingsdealingsdealings
inininin SpecifiedSpecifiedSpecifiedSpecified BankBankBankBank NotesNotesNotesNotes duringduringduringduring thethethethe periodperiodperiodperiod fromfromfromfrom 8888thththth
November,November,November,November, 2016201620162016 totototo 30303030thththth December,December,December,December, 2016201620162016.... However,However,However,However,
wewewewe areareareare unableunableunableunable totototo obtainobtainobtainobtain sufficientsufficientsufficientsufficient andandandand appropriateappropriateappropriateappropriate
auditauditauditaudit evidenceevidenceevidenceevidence totototo reportreportreportreport onononon whetherwhetherwhetherwhether thethethethe disclosuresdisclosuresdisclosuresdisclosures areareareare
inininin accordanceaccordanceaccordanceaccordance withwithwithwith booksbooksbooksbooks ofofofof accountaccountaccountaccount maintainedmaintainedmaintainedmaintained bybybyby thethethethe
CompanyCompanyCompanyCompany andandandand asasasas producedproducedproducedproduced totototo usususus bybybyby thethethethe ManagementManagementManagementManagement ––––
ReferReferReferRefer NoteNoteNoteNote [*][*][*][*];;;;
AlsoAlsoAlsoAlso commentcommentcommentcomment inininin reportreportreportreport –––– notnotnotnot receivedreceivedreceivedreceived informationinformationinformationinformation
CA. Pramod Jain

CompanyCompanyCompanyCompany diddiddiddid notnotnotnot givegivegivegive disclosuresdisclosuresdisclosuresdisclosures::::
TheTheTheThe CompanyCompanyCompanyCompany hashashashas notnotnotnot providedprovidedprovidedprovided requisiterequisiterequisiterequisite disclosuresdisclosuresdisclosuresdisclosures inininin thethethethe
financialfinancialfinancialfinancial statementsstatementsstatementsstatements asasasas totototo holdingsholdingsholdingsholdings asasasas wellwellwellwell asasasas dealingsdealingsdealingsdealings inininin
SpecifiedSpecifiedSpecifiedSpecified BankBankBankBank NotesNotesNotesNotes duringduringduringduring thethethethe periodperiodperiodperiod fromfromfromfrom 8888thththth November,November,November,November,
2016201620162016 totototo 30303030thththth December,December,December,December, 2016201620162016.
CompanyCompanyCompanyCompany diddiddiddid notnotnotnot givegivegivegive certaincertaincertaincertain requisiterequisiterequisiterequisite disclosuresdisclosuresdisclosuresdisclosures::::
TheTheTheThe CompanyCompanyCompanyCompany hashashashas notnotnotnot providedprovidedprovidedprovided certaincertaincertaincertain requisiterequisiterequisiterequisite disclosuresdisclosuresdisclosuresdisclosures inininin
thethethethe FSFSFSFS asasasas totototo holdingsholdingsholdingsholdings asasasas wellwellwellwell asasasas dealingsdealingsdealingsdealings inininin SpecifiedSpecifiedSpecifiedSpecified BankBankBankBank
NotesNotesNotesNotes duringduringduringduring periodperiodperiodperiod fromfromfromfrom 8888....11111111....2016201620162016 totototo 30303030....12121212....2016201620162016....
ConsequentlyConsequentlyConsequentlyConsequently wewewewe areareareare unableunableunableunable totototo obtainobtainobtainobtain sufficientsufficientsufficientsufficient andandandand appropriateappropriateappropriateappropriate
auditauditauditaudit evidenceevidenceevidenceevidence totototo reportreportreportreport whetherwhetherwhetherwhether thethethethe disclosuresdisclosuresdisclosuresdisclosures totototo thethethethe extentextentextentextent
statedstatedstatedstated inininin thethethethe notesnotesnotesnotes areareareare inininin accordanceaccordanceaccordanceaccordance withwithwithwith booksbooksbooksbooks ofofofof accountaccountaccountaccount
maintainedmaintainedmaintainedmaintained bybybyby thethethethe CompanyCompanyCompanyCompany andandandand asasasas producedproducedproducedproduced totototo usususus bybybyby thethethethe
ManagementManagementManagementManagement –––– ReferReferReferRefer NoteNoteNoteNote [*][*][*][*]
AlsoAlsoAlsoAlso commentcommentcommentcomment inininin bothbothbothboth casescasescasescases –––– notnotnotnot receivedreceivedreceivedreceived informationinformationinformationinformation
CA. Pramod Jain

CompanyCompanyCompanyCompany hashashashas disclosed,disclosed,disclosed,disclosed, butbutbutbut havehavehavehave transactedtransactedtransactedtransacted inininin nonnonnonnon----
permittedpermittedpermittedpermitted receipt/paymentsreceipt/paymentsreceipt/paymentsreceipt/payments
TheTheTheThe CompanyCompanyCompanyCompany hashashashas providedprovidedprovidedprovided requisiterequisiterequisiterequisite disclosuresdisclosuresdisclosuresdisclosures
inininin thethethethe financialfinancialfinancialfinancial statementsstatementsstatementsstatements asasasas totototo holdingsholdingsholdingsholdings asasasas wellwellwellwell
asasasas dealingsdealingsdealingsdealings inininin SpecifiedSpecifiedSpecifiedSpecified BankBankBankBank NotesNotesNotesNotes duringduringduringduring thethethethe
periodperiodperiodperiod fromfromfromfrom 8888thththth November,November,November,November, 2016201620162016 totototo 30303030thththth
December,December,December,December, 2016201620162016.... However,However,However,However, asasasas statedstatedstatedstated inininin notesnotesnotesnotes [*][*][*][*]
totototo thethethethe financialfinancialfinancialfinancial statementsstatementsstatementsstatements amountsamountsamountsamounts aggregatingaggregatingaggregatingaggregating
totototo RsRsRsRs.... [[[[ ]]]] asasasas representedrepresentedrepresentedrepresented totototo usususus bybybyby thethethethe ManagementManagementManagementManagement
havehavehavehave beenbeenbeenbeen utilizedutilizedutilizedutilized forforforfor otherotherotherother thanthanthanthan permittedpermittedpermittedpermitted
transactions/receivedtransactions/receivedtransactions/receivedtransactions/received amountamountamountamount aggregatingaggregatingaggregatingaggregating RsRsRsRs.... [[[[ ]]]]
fromfromfromfrom transactionstransactionstransactionstransactions whichwhichwhichwhich areareareare notnotnotnot permittedpermittedpermittedpermitted;;;;
CA. Pramod Jain

APPLICABILITY OVERVIEWAPPLICABILITY OVERVIEW
CA. Pramod Jain

ICDSICDSICDSICDS BACKGROUNDBACKGROUNDBACKGROUNDBACKGROUND
CG notified 10 ICDS vide notification no. 32 of 2015CG notified 10 ICDS vide notification no. 32 of 2015CG notified 10 ICDS vide notification no. 32 of 2015CG notified 10 ICDS vide notification no. 32 of 2015
dated 31dated 31dated 31dated 31stststst March 2015 which were applicable fromMarch 2015 which were applicable fromMarch 2015 which were applicable fromMarch 2015 which were applicable from
AY 2016AY 2016AY 2016AY 2016----17 onwards17 onwards17 onwards17 onwards
Due to various issues and representations madeDue to various issues and representations madeDue to various issues and representations madeDue to various issues and representations made
referred to Expert committee.referred to Expert committee.referred to Expert committee.referred to Expert committee.
ICDS deferred by 1 year (P. R. Dt. 6ICDS deferred by 1 year (P. R. Dt. 6ICDS deferred by 1 year (P. R. Dt. 6ICDS deferred by 1 year (P. R. Dt. 6thththth July 2016).July 2016).July 2016).July 2016).
CBDT rescinded the old ICDS through notification no.CBDT rescinded the old ICDS through notification no.CBDT rescinded the old ICDS through notification no.CBDT rescinded the old ICDS through notification no.
86/2016 dated 2986/2016 dated 2986/2016 dated 2986/2016 dated 29thththth September 2016 and issuedSeptember 2016 and issuedSeptember 2016 and issuedSeptember 2016 and issued
revised ICDS vide notification no. 87/2016 andrevised ICDS vide notification no. 87/2016 andrevised ICDS vide notification no. 87/2016 andrevised ICDS vide notification no. 87/2016 and
amendedamendedamendedamended TTTTaxaxaxax AAAAudit Form 3CD.udit Form 3CD.udit Form 3CD.udit Form 3CD.
Also issued FAQs dated 25Also issued FAQs dated 25Also issued FAQs dated 25Also issued FAQs dated 25thththth March 2017March 2017March 2017March 2017
CA. Pramod Jain

WHO TO FOLLOWWHO TO FOLLOWWHO TO FOLLOWWHO TO FOLLOW ICDSICDSICDSICDS
AssesseeAssesseeAssesseeAssessee
havinghavinghavinghaving
PGBP &PGBP &PGBP &PGBP &
OtherOtherOtherOther
SourceSourceSourceSource
incomeincomeincomeincome
havinghavinghavinghaving
Method ofMethod ofMethod ofMethod of
AccountingAccountingAccountingAccounting
MercantileMercantileMercantileMercantile
Individual &Individual &Individual &Individual &
HUFHUFHUFHUF
Tax AuditTax AuditTax AuditTax Audit ––––
To followTo followTo followTo follow
ICDSICDSICDSICDS
No TaxNo TaxNo TaxNo Tax
AuditAuditAuditAudit –––– NoNoNoNo
ICDSICDSICDSICDS
OthersOthersOthersOthers
To followTo followTo followTo follow
ICDSICDSICDSICDS
CashCashCashCash No ICDSNo ICDSNo ICDSNo ICDS
CA. Pramod Jain

SUMMARYSUMMARYSUMMARYSUMMARY
•Section 145(2)Section 145(2)Section 145(2)Section 145(2)SourceSourceSourceSource
•W.e.fW.e.fW.e.fW.e.f. AY 2017. AY 2017. AY 2017. AY 2017----18181818Effective DateEffective DateEffective DateEffective Date
•Only on PGBP & Other SourceOnly on PGBP & Other SourceOnly on PGBP & Other SourceOnly on PGBP & Other Source
•If accounts on mercantile basisIf accounts on mercantile basisIf accounts on mercantile basisIf accounts on mercantile basis
Heads ofHeads ofHeads ofHeads of
IncomeIncomeIncomeIncome
•10 vide Not. Dt. 29.09.201610 vide Not. Dt. 29.09.201610 vide Not. Dt. 29.09.201610 vide Not. Dt. 29.09.2016
No. ofNo. ofNo. ofNo. of
StandardsStandardsStandardsStandards
•Para 13 of Form 3CD & ITRPara 13 of Form 3CD & ITRPara 13 of Form 3CD & ITRPara 13 of Form 3CD & ITRDisclosureDisclosureDisclosureDisclosure
CA. Pramod Jain

CORRESPONDING AS /CORRESPONDING AS /CORRESPONDING AS /CORRESPONDING AS / INDINDINDIND ASASASAS
ICDICDICDICD
SSSS
Name of ICDSName of ICDSName of ICDSName of ICDS CorrespondiCorrespondiCorrespondiCorrespondi
ng ASng ASng ASng AS
CorrespondingCorrespondingCorrespondingCorresponding
IndIndIndInd ASASASAS
IIII Accounting PoliciesAccounting PoliciesAccounting PoliciesAccounting Policies 1 & 51 & 51 & 51 & 5 1111 & 8& 8& 8& 8
IIIIIIII Valuation of InventoriesValuation of InventoriesValuation of InventoriesValuation of Inventories 2222 2222
IIIIIIIIIIII Construction ContractsConstruction ContractsConstruction ContractsConstruction Contracts 7777 11111111
IVIVIVIV Revenue RecognitionRevenue RecognitionRevenue RecognitionRevenue Recognition 9999 11111111
VVVV Tangible Fixed AssetsTangible Fixed AssetsTangible Fixed AssetsTangible Fixed Assets 10101010 16161616
VIVIVIVI Changes in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange Rates 11111111 21212121
VIIVIIVIIVII Government GrantsGovernment GrantsGovernment GrantsGovernment Grants 12121212 20202020
VIIIVIIIVIIIVIII SecuritiesSecuritiesSecuritiesSecurities 13131313 109109109109
IXIXIXIX Borrowing CostsBorrowing CostsBorrowing CostsBorrowing Costs 16161616 23232323
XXXX Provisions, Contingent Liabilities &Provisions, Contingent Liabilities &Provisions, Contingent Liabilities &Provisions, Contingent Liabilities &
ContingentContingentContingentContingent AssetsAssetsAssetsAssets
29292929 37373737
CA. Pramod Jain

BASICSBASICSBASICSBASICS
It’s for income computation only and NOT forIt’s for income computation only and NOT forIt’s for income computation only and NOT forIt’s for income computation only and NOT for
books maintenancebooks maintenancebooks maintenancebooks maintenance
Is separate books to be maintained?Is separate books to be maintained?Is separate books to be maintained?Is separate books to be maintained?
ICAI standards amendedICAI standards amendedICAI standards amendedICAI standards amended –––– Examples removedExamples removedExamples removedExamples removed
Would it impact incomes u/s 44AD, 44AE,Would it impact incomes u/s 44AD, 44AE,Would it impact incomes u/s 44AD, 44AE,Would it impact incomes u/s 44AD, 44AE, etcetcetcetc????
FAQFAQFAQFAQ ---- ApplicableApplicableApplicableApplicable on 44on 44on 44on 44 AD…whereverAD…whereverAD…whereverAD…wherever possiblepossiblepossiblepossible ––––
exampleexampleexampleexample constructionconstructionconstructionconstruction contracts, revenuecontracts, revenuecontracts, revenuecontracts, revenue
recognition??recognition??recognition??recognition??
What about firms under s. 44AD?What about firms under s. 44AD?What about firms under s. 44AD?What about firms under s. 44AD?
No ICDS details in ITR 1, 2 & 4No ICDS details in ITR 1, 2 & 4No ICDS details in ITR 1, 2 & 4No ICDS details in ITR 1, 2 & 4
CA. Pramod Jain

BASICSBASICSBASICSBASICS
WouldWouldWouldWould it impact MAT / AMT??it impact MAT / AMT??it impact MAT / AMT??it impact MAT / AMT??
ICDS not to apply on MAT but applicable on AMTICDS not to apply on MAT but applicable on AMTICDS not to apply on MAT but applicable on AMTICDS not to apply on MAT but applicable on AMT –––– QQQQ
6 FAQ6 FAQ6 FAQ6 FAQ
Take care of AS 22Take care of AS 22Take care of AS 22Take care of AS 22
What if assesse has no business income but onlyWhat if assesse has no business income but onlyWhat if assesse has no business income but onlyWhat if assesse has no business income but only
income from other sources?income from other sources?income from other sources?income from other sources?
What if has one business on mercantile basis andWhat if has one business on mercantile basis andWhat if has one business on mercantile basis andWhat if has one business on mercantile basis and
other on cash ?other on cash ?other on cash ?other on cash ?
Transitional provisionsTransitional provisionsTransitional provisionsTransitional provisions ---- neither double taxation norneither double taxation norneither double taxation norneither double taxation nor
escapement ofescapement ofescapement ofescapement of incomeincomeincomeincome
Disclosure requirements in 8 ICDSDisclosure requirements in 8 ICDSDisclosure requirements in 8 ICDSDisclosure requirements in 8 ICDS
CA. Pramod Jain

ICDSICDSICDSICDS VS. JUDICIAL PRECEDENTSVS. JUDICIAL PRECEDENTSVS. JUDICIAL PRECEDENTSVS. JUDICIAL PRECEDENTS
InInInIn AvinderAvinderAvinderAvinder Singh [AIR 1979 SC 321]Singh [AIR 1979 SC 321]Singh [AIR 1979 SC 321]Singh [AIR 1979 SC 321] SCSCSCSC held that whatheld that whatheld that whatheld that what
constitutes an essential feature cannot be delineated.constitutes an essential feature cannot be delineated.constitutes an essential feature cannot be delineated.constitutes an essential feature cannot be delineated.
It laidIt laidIt laidIt laid downdowndowndown followingfollowingfollowingfollowing tests for valid delegationtests for valid delegationtests for valid delegationtests for valid delegation ::::
LegislatureLegislatureLegislatureLegislature cannot effacecannot effacecannot effacecannot efface itselfitselfitselfitself
It cannot delegateIt cannot delegateIt cannot delegateIt cannot delegate plenaryplenaryplenaryplenary or the essential legislativeor the essential legislativeor the essential legislativeor the essential legislative
functionfunctionfunctionfunction
Even if there beEven if there beEven if there beEven if there be delegationdelegationdelegationdelegation, Parliamentary control over, Parliamentary control over, Parliamentary control over, Parliamentary control over
delegated legislation should be a living continuity as adelegated legislation should be a living continuity as adelegated legislation should be a living continuity as adelegated legislation should be a living continuity as a
constitutional necessityconstitutional necessityconstitutional necessityconstitutional necessity....
FAQFAQFAQFAQ ---- ICDS notified u/s 145(2)ICDS notified u/s 145(2)ICDS notified u/s 145(2)ICDS notified u/s 145(2) &&&& would be applicablewould be applicablewould be applicablewould be applicable
to transactional issues dealt therein from AY 2017to transactional issues dealt therein from AY 2017to transactional issues dealt therein from AY 2017to transactional issues dealt therein from AY 2017----18181818
onwardsonwardsonwardsonwards
Lunawat & Co.

VALIDITY OF DELEGATED LEGISLATIONVALIDITY OF DELEGATED LEGISLATIONVALIDITY OF DELEGATED LEGISLATIONVALIDITY OF DELEGATED LEGISLATION
AS 22 validity (delegated legislation) came upAS 22 validity (delegated legislation) came upAS 22 validity (delegated legislation) came upAS 22 validity (delegated legislation) came up
before the Supreme court in the case ofbefore the Supreme court in the case ofbefore the Supreme court in the case ofbefore the Supreme court in the case of J.K.J.K.J.K.J.K.
Industries Ltd. v. Union of India [2008] 297 ITR 176Industries Ltd. v. Union of India [2008] 297 ITR 176Industries Ltd. v. Union of India [2008] 297 ITR 176Industries Ltd. v. Union of India [2008] 297 ITR 176
(SC)(SC)(SC)(SC)
Supreme Court upheld the validity of the RuleSupreme Court upheld the validity of the RuleSupreme Court upheld the validity of the RuleSupreme Court upheld the validity of the Rule
adopting ASadopting ASadopting ASadopting AS‐‐‐‐22 and held that the disclosure of22 and held that the disclosure of22 and held that the disclosure of22 and held that the disclosure of
true and fair view of the profits and the state oftrue and fair view of the profits and the state oftrue and fair view of the profits and the state oftrue and fair view of the profits and the state of
affairs is the guideline inherent in the provisionsaffairs is the guideline inherent in the provisionsaffairs is the guideline inherent in the provisionsaffairs is the guideline inherent in the provisions
of the Companies Act delegating the powers toof the Companies Act delegating the powers toof the Companies Act delegating the powers toof the Companies Act delegating the powers to
notify accounting standards and that thenotify accounting standards and that thenotify accounting standards and that thenotify accounting standards and that the
adoption of ASadoption of ASadoption of ASadoption of AS‐‐‐‐22 was within such guideline22 was within such guideline22 was within such guideline22 was within such guideline
CA. Pramod Jain

SEQUENCE OF PREVALENCESEQUENCE OF PREVALENCESEQUENCE OF PREVALENCESEQUENCE OF PREVALENCE
ACTACTACTACT
RULESRULESRULESRULES
ICDSICDSICDSICDS
JUDICIALJUDICIALJUDICIALJUDICIAL
PRECEDENTSPRECEDENTSPRECEDENTSPRECEDENTS
CA. Pramod Jain

WHAT TO DOWHAT TO DOWHAT TO DOWHAT TO DO
CA. Pramod Jain

ICDSICDSICDSICDS STUDY & EVALUATIONSTUDY & EVALUATIONSTUDY & EVALUATIONSTUDY & EVALUATION
AssesseAssesseAssesseAssesse AuditorAuditorAuditorAuditor
CA. Pramod Jain

ICDSICDSICDSICDS CHECKLISTCHECKLISTCHECKLISTCHECKLIST
ICDICDICDICD
SSSS
Name of ICDSName of ICDSName of ICDSName of ICDS WhetherWhetherWhetherWhether
ApplicableApplicableApplicableApplicable
Amounts inAmounts inAmounts inAmounts in
ITR & 3CDITR & 3CDITR & 3CDITR & 3CD
DisclosurDisclosurDisclosurDisclosur
es in 3CDes in 3CDes in 3CDes in 3CD
RemaRemaRemaRema
rksrksrksrks
IIII Accounting PoliciesAccounting PoliciesAccounting PoliciesAccounting Policies YesYesYesYes
IIIIIIII Valuation of InventoriesValuation of InventoriesValuation of InventoriesValuation of Inventories
IIIIIIIIIIII Construction ContractsConstruction ContractsConstruction ContractsConstruction Contracts
IVIVIVIV Revenue RecognitionRevenue RecognitionRevenue RecognitionRevenue Recognition YesYesYesYes
VVVV Tangible Fixed AssetsTangible Fixed AssetsTangible Fixed AssetsTangible Fixed Assets
VIVIVIVI Changes in Foreign ExchangeChanges in Foreign ExchangeChanges in Foreign ExchangeChanges in Foreign Exchange
RatesRatesRatesRates
VIIVIIVIIVII Government GrantsGovernment GrantsGovernment GrantsGovernment Grants
VIIIVIIIVIIIVIII SecuritiesSecuritiesSecuritiesSecurities
IXIXIXIX Borrowing CostsBorrowing CostsBorrowing CostsBorrowing Costs
XXXX Provisions, ContingentProvisions, ContingentProvisions, ContingentProvisions, Contingent
Liabilities& ContingentLiabilities& ContingentLiabilities& ContingentLiabilities& Contingent AssetsAssetsAssetsAssets
CA. Pramod Jain

FORM 3CDFORM 3CDFORM 3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE ---- 13131313
Method of accounting employed in previousMethod of accounting employed in previousMethod of accounting employed in previousMethod of accounting employed in previous
yearyearyearyear
Change in method of accounting appliedChange in method of accounting appliedChange in method of accounting appliedChange in method of accounting applied
If, yes, effect thereof on profit / lossIf, yes, effect thereof on profit / lossIf, yes, effect thereof on profit / lossIf, yes, effect thereof on profit / loss
Deviation in method of accounting fromDeviation in method of accounting fromDeviation in method of accounting fromDeviation in method of accounting from
accounting standards prescribed u/s 145accounting standards prescribed u/s 145accounting standards prescribed u/s 145accounting standards prescribed u/s 145
and effect thereof on P/Land effect thereof on P/Land effect thereof on P/Land effect thereof on P/L
ICDS reporting brought inICDS reporting brought inICDS reporting brought inICDS reporting brought in w.e.fw.e.fw.e.fw.e.f. 1.4.2017. 1.4.2017. 1.4.2017. 1.4.2017
CA. Pramod Jain

FORM 3CDFORM 3CDFORM 3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE ---- 13131313
((((d)d)d)d) –––– whether any adjustment is required towhether any adjustment is required towhether any adjustment is required towhether any adjustment is required to
be made to the profits or loss for complyingbe made to the profits or loss for complyingbe made to the profits or loss for complyingbe made to the profits or loss for complying
with the ICDS notified u/s 145(2)with the ICDS notified u/s 145(2)with the ICDS notified u/s 145(2)with the ICDS notified u/s 145(2)
(e)(e)(e)(e) –––– Is, yes, give detailsIs, yes, give detailsIs, yes, give detailsIs, yes, give details
(f)(f)(f)(f) –––– Disclosure as per ICDSDisclosure as per ICDSDisclosure as per ICDSDisclosure as per ICDS
For 8 standardsFor 8 standardsFor 8 standardsFor 8 standards
Two omitted as no disclosure required as perTwo omitted as no disclosure required as perTwo omitted as no disclosure required as perTwo omitted as no disclosure required as per
the standard:the standard:the standard:the standard:
Changes in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange Rates
SecuritiesSecuritiesSecuritiesSecurities
CA. Pramod Jain

FORM 3CDFORM 3CDFORM 3CDFORM 3CD ––––CLAUSECLAUSECLAUSECLAUSE –––– 13131313 ---- ICDSICDSICDSICDS
ICDICDICDICD
SSSS
Name of ICDSName of ICDSName of ICDSName of ICDS IncreaseIncreaseIncreaseIncrease
in Profitin Profitin Profitin Profit
DecreaseDecreaseDecreaseDecrease
in Profitin Profitin Profitin Profit
NetNetNetNet
((((RsRsRsRs.).).).)
DescriptiDescriptiDescriptiDescripti
onononon
IIII Accounting PoliciesAccounting PoliciesAccounting PoliciesAccounting Policies
IIIIIIII Valuation of InventoriesValuation of InventoriesValuation of InventoriesValuation of Inventories
IIIIIIIIIIII Construction ContractsConstruction ContractsConstruction ContractsConstruction Contracts
IVIVIVIV Revenue RecognitionRevenue RecognitionRevenue RecognitionRevenue Recognition
VVVV Tangible Fixed AssetsTangible Fixed AssetsTangible Fixed AssetsTangible Fixed Assets
VIVIVIVI Changes in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange RatesChanges in Foreign Exchange Rates
VIIVIIVIIVII Government GrantsGovernment GrantsGovernment GrantsGovernment Grants
VIIIVIIIVIIIVIII SecuritiesSecuritiesSecuritiesSecurities
IXIXIXIX Borrowing CostsBorrowing CostsBorrowing CostsBorrowing Costs
XXXX Provisions, ContingentProvisions, ContingentProvisions, ContingentProvisions, Contingent LiabLiabLiabLiab & Assets& Assets& Assets& Assets
CA. Pramod Jain

ITRITRITRITR
Schedule ICDS Effect of Income Computation Disclosure Standards on profit
Sl. No. ICDS Amount
(i) (ii) (iii)
I Accounting Policies
II Valuation of Inventories
III Construction Contracts
IV Revenue Recognition
V Tangible Fixed Assets
VI Changes in Foreign Exchange Rates
VII Government Grants
VIII Securities
IX Borrowing Costs
X Provisions, Contingent Liabilities and Contingent Assets
XI Total Net effect (I+II+III+IV+V+VI+VII+VIII+IX+X) 0
Is there any impact of this disclosure onIs there any impact of this disclosure onIs there any impact of this disclosure onIs there any impact of this disclosure on
Computation in ITR automatically?Computation in ITR automatically?Computation in ITR automatically?Computation in ITR automatically?
CA. Pramod Jain

WHAT IFWHAT IFWHAT IFWHAT IF ICDSICDSICDSICDS NOT FOLLOWEDNOT FOLLOWEDNOT FOLLOWEDNOT FOLLOWED
Section 145(3Section 145(3Section 145(3Section 145(3)))) ---- AOAOAOAO has the power to make besthas the power to make besthas the power to make besthas the power to make best
judgementjudgementjudgementjudgement assessment u/s. 144 if he is notassessment u/s. 144 if he is notassessment u/s. 144 if he is notassessment u/s. 144 if he is not
satisfied about thesatisfied about thesatisfied about thesatisfied about the ::::----
CorrectnessCorrectnessCorrectnessCorrectness or completeness of the accounts of theor completeness of the accounts of theor completeness of the accounts of theor completeness of the accounts of the
assesseeassesseeassesseeassessee ; or; or; or; or
MethodMethodMethodMethod of accounting is not regularly followedof accounting is not regularly followedof accounting is not regularly followedof accounting is not regularly followed
;;;;orororor
IncomeIncomeIncomeIncome not computed as per ICDSnot computed as per ICDSnot computed as per ICDSnot computed as per ICDS
HenceHenceHenceHence ICDS has to be mandatorily followed or elseICDS has to be mandatorily followed or elseICDS has to be mandatorily followed or elseICDS has to be mandatorily followed or else
bestbestbestbest judgementjudgementjudgementjudgement assessment can be done byassessment can be done byassessment can be done byassessment can be done by
Assessing OfficerAssessing OfficerAssessing OfficerAssessing Officer.
CA. Pramod Jain

CBDT FAQS DT. 23CBDT FAQS DT. 23CBDT FAQS DT. 23CBDT FAQS DT. 23RDRDRDRD MARCH 2017MARCH 2017MARCH 2017MARCH 2017
Total 25 FAQsTotal 25 FAQsTotal 25 FAQsTotal 25 FAQs
ICDS to apply onICDS to apply onICDS to apply onICDS to apply on IndIndIndInd AS FS tooAS FS tooAS FS tooAS FS too
Applicable to all including bankApplicable to all including bankApplicable to all including bankApplicable to all including bank etcetcetcetc unlessunlessunlessunless
specifiedspecifiedspecifiedspecified –––– like ICDS VIII (securities) for certainlike ICDS VIII (securities) for certainlike ICDS VIII (securities) for certainlike ICDS VIII (securities) for certain
financial institutions & ICDS I for Insurancefinancial institutions & ICDS I for Insurancefinancial institutions & ICDS I for Insurancefinancial institutions & ICDS I for Insurance
businessbusinessbusinessbusiness
ReasonableReasonableReasonableReasonable cause is an existing conceptcause is an existing conceptcause is an existing conceptcause is an existing concept
conferring flexibility in deservingconferring flexibility in deservingconferring flexibility in deservingconferring flexibility in deserving casescasescasescases
No specific ICDS yet for real estate developers &No specific ICDS yet for real estate developers &No specific ICDS yet for real estate developers &No specific ICDS yet for real estate developers &
BOT projects and leases. Normal Act & ICDSBOT projects and leases. Normal Act & ICDSBOT projects and leases. Normal Act & ICDSBOT projects and leases. Normal Act & ICDS
applicableapplicableapplicableapplicable
CA. Pramod Jain

CBDT FAQS DT. 23CBDT FAQS DT. 23CBDT FAQS DT. 23CBDT FAQS DT. 23RDRDRDRD MARCH 2017MARCH 2017MARCH 2017MARCH 2017
For Derivative contracts :For Derivative contracts :For Derivative contracts :For Derivative contracts :
Forward contracts and similarForward contracts and similarForward contracts and similarForward contracts and similar ---- ICDS VI [ForeignICDS VI [ForeignICDS VI [ForeignICDS VI [Foreign
Exchange] subject to para 3 of ICDS VIII [securities]Exchange] subject to para 3 of ICDS VIII [securities]Exchange] subject to para 3 of ICDS VIII [securities]Exchange] subject to para 3 of ICDS VIII [securities]
For others ICDS IFor others ICDS IFor others ICDS IFor others ICDS I
DisclosureDisclosureDisclosureDisclosure where to be madewhere to be madewhere to be madewhere to be made –––– Q 25Q 25Q 25Q 25
Net effect of ICDS to be disclosed in IT ReturnNet effect of ICDS to be disclosed in IT ReturnNet effect of ICDS to be disclosed in IT ReturnNet effect of ICDS to be disclosed in IT Return
Form 3CDForm 3CDForm 3CDForm 3CD
No separate disclosures persons who are notNo separate disclosures persons who are notNo separate disclosures persons who are notNo separate disclosures persons who are not
liable for taxliable for taxliable for taxliable for tax auditauditauditaudit
CA. Pramod Jain

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