The document discusses tax audit under section 44AB of the Income Tax Act. It provides details on who is required to get their accounts audited based on the thresholds for total sales, turnover or gross receipts. It also outlines the due dates for furnishing tax audit reports, the applicable forms (Form 3CA, 3CB, 3CD), penalties for non-compliance, and who is eligible to conduct such audits.

1. TAX AUDIT
1
CA Iti Parwal

2. DIRECTION OF FISCAL LAWS
• Clearing the garbage
• Opportunity to go clean
• Reducing scope of new garbage
• Early compliances and optimisation of tax rates
• Risk management strategy
• Early assessment
• Faceless regime and minimum litigation
• Removing scope of disputes
• Mechanism for small issues
• No escape for dishonest. 2

3. WHAT IS TAX AUDIT
 A tax audit is the process of verification and
inspection of the accounts of a taxpayer to confirm
their adherence to the provisions of the Income Tax
law.
 Section 44AB compulsorily requires certain class of
taxpayers listed under this section to get their
accounts audited by a Chartered Accountant who
are carrying on a business or engaged in a
profession.
 The outcome of the audit is an Audit Report
3

4. 4
WHAT IS TAX AUDIT
SECTION 44AB
RULE 6G
FORM 3CA
FORM 3CB
FORM 3CD
SECTION 271B

5. TO WHOM TAX AUDIT IS APPLICABLE AS PER
SECTION 44AB ?
CATEGORY OF PERSONS THRESHOLD
BUSINESS
1) Carrying on business (Not opting for
presumptive taxation scheme)
Total sales, turnover or gross receipts
exceed Rs.1 crore in the FY. [Section
44AB(a)]
2) Carrying on business (Opting for
presumptive taxation scheme) u/s
44AD.
Total sales, turnover or gross receipts
exceed Rs. 2 crore in the FY.
3) Carrying on business eligible for
presumptive taxation under Section
44AD
Declares taxable income below the
limits prescribed under the
presumptive tax scheme AND has
income exceeding the basic threshold
limit. [Section 44AB(e)] 5

6. CATEGORY OF PERSONS THRESHOLD
4) Carrying on the business and is not
eligible to claim presumptive taxation
under Section 44AD due to opting out
for presumptive taxation in any one
financial year of the lock-in period i.e. 5
consecutive years from when the
presumptive tax scheme was opted.
If income exceeds the maximum
amount not chargeable to tax in the
subsequent 5 consecutive tax years
from the financial year when the
presumptive taxation was not opted
for. [Section 44AD(5)]
5 ) Carrying on business eligible for
presumptive taxation under Section
44AE, 44BB or 44BBB
Claims profits or gains lower than the
prescribed limit under the scheme.
[Section 44AB(c)]
6

7. CATEGORY OF PERSONS THRESHOLD
PROFESSION
1) Carrying on profession Total gross receipts exceed Rs 50 lakh in
the FY. [Section 44AB(b)]
2) Carrying on the profession
eligible for presumptive taxation
under section 44ADA
1. Claims profits or gains lower than the
prescribed limit under the presumptive
taxation scheme, AND
2. Income exceeds the maximum
amount not chargeable to income tax.
[Section 44AB(d)]
7
TO WHOM IS A TAX AUDIT APPLICABLE AS PER
SECTION 44AB ?

8. RECENT AMENDMENT
 As per 1st proviso to section 44AB, the limit of ‘one crore
rupees’ shall be substituted by “ten crore rupees” if:
 Aggregate of all the amounts received during the P.Y., in cash,
does not exceed 5% of said amount. AND
 Aggregate of all the amounts paid during the P.Y., in cash, does
not exceed 5% of said amount.
 2nd proviso recently added by the Finance Act 2021
 Provided further that for the purposes of this clause, the
payment or receipt, as the case may be, by a cheque drawn on
a bank or by a bank draft, which is not account payee, shall be
deemed to be the payment or receipt, as the case may be, in
cash.
8

9. 9
Particular Turnover Exemption
Limit
Condition
Business 1Cr
10 Cr
-
Aggregate receipts* or
payment** in cash(including
cheques which is not account
payee) =< 5% of total
receipts/payments
Profession 50 lacs
*Cash receipts include amount received on account of sales, turnover
or gross receipts or on account of capital contributions, loans etc
during the previous year.
**Cash payments include payment made including amount incurred
for expenditure or on capital account such as asset acquisition,
repayment of loan etc., in cash during the previous year.
TO WHOM IS A TAX AUDIT APPLICABLE AS PER
SECTION 44AB ?

10. 10
TO WHOM IS A TAX AUDIT APPLICABLE AS PER
SECTION 44AB ?
1st Year 2nd Year 3rd Year
Turnover 95 Lacs 99 Lacs 98 Lacs
44AA YES YES
44AD YES
44AB YES
Income 4 Lacs 8 Lacs 6 Lacs
4th Year 5th Year* 6th Year 7th Year 8th Year
105 Lacs 97 Lacs 95 Lacs 90 Lacs 110 Lacs
14 Lacs 2 Lacs 4 Lacs 8 Lacs 10 Lacs

11. 11
Ms. B trading (all cash)- 90L; NP- 10 L; Doctor Fee- 45L; NP-
25L
AD-No
ADA-Yes
AB-No
Mr. D –trading; Turnover (all cash)-95L; Commission- 6L; NP 15
L
AD-No
AB-Yes
Mr. E –Agriculturist; Turnover (all cash)- 5Cr;
AD-No
AB-No
APPLICABILITY OF SECTION 44AD/ 44ADA/
44AB ?

12. 12
DUE DATE OF FURNISHING TAX AUDIT REPORT
SECTION As Per IT ACT A.Y. 2021-22
44AB Date one month prior to the
due date for furnishing the
return of income u/s
139(1). Therefore, the due
date is 30th Sept.
CBDT circular No. 9/2021 dated
20.05.2021 extended to 31st
October 2021.
Later, CBDT circular No. 17/2021
dated 09.09.2021 further
extended to 15th January 2022.
92E Date one month prior to the
due date for furnishing the
return of income u/s
139(1). Therefore, the due
date is 31th October.
CBDT circular No. 9/2021 dated
20.05.2021 extended to 30th
November 2021.
Later, CBDT circular No. 17/2021
dated 09.09.2021 further
extended to 31th January 2022.

13. REPORT OF TAX AUDIT - RULE 6G
13
Rule 6G
Form 3CA Form 3CB
Form 3CD
Prescribing the
Forms for Report
u/s 44AB
Report in case of a
person who is required
to get his accounts
audited under any
other law.
Report in any other
case (44 Clauses)
Statement of particulars
as required in Form 3CA
or Form CB

14. 14
Whether - 3CA OR 3CB?
Co. incorporated on or after 01.01.2021, Turnover 6 Crore
LLP turnover exceeds 40 Lacs
Co. converted into LLP; Co’s turnover- 90 lacs, LLP turnover: 50
lacs
LLP Audit report format: SA 700

15. FAILURE TO GET ACCOUNTS AUDITED
SECTION 271B: If any person fails to:
15
Fails to get his accounts audited
OR
Fails to furnish Audit Report as
required u/s 44AB
Penalty:
One-half per cent,
OR
Rs. 1,50,000
whichever is lower
One-half per-cent shall be:
• In case of business: Total sales, turnover or gross receipts
• In case of profession: Gross receipts

16. 16
REPORT UNDER SECTION RULE FORM PRESCRIBED
50B: Slump sale 6H 3CEA
92E: Transfer Pricing 10E 3CEB
142(2A): Special Audit 14A 6B
12A(b): Trust 17B 10B
10(23C) 16CC 10BB
ELECTORAL TRUST 17CA 10BC
80HH/ 80HHA/ 80HHB/
80HHBA/ 80HHC/ 80HHD/
80HHE/ 80HHF
18B/ 18BB/
18BBA
10C/ 10CC/ 10CCA/
10CCAA/ 10CCAC/
10CCAD/ 10CCAF/ 10CCAI
80I/ IA/ IB/ IC 18BBB 10CCB, 10CCBA, 10CCBB,
10CCBBA, 10CCBC,
10CCBD
AUDIT REPORT UNDER OTHER SECTIONS OF
THE ACT

17. REPORT UNDER SECTION RULE FORM
80LA(3): Offshore banking units 19AE 10CCF
80JJAA: Employment of new
employees
19AB 10DA
115JB: MAT for companies 40B 29B
115JC: MAT for other than company 40AB 29C
10A: Newly established undertaking in
free trade zone.
16D 56F
10B: Newly established 100% export
oriented undertaking.
16E 56G
10BA: Export of Hand-made articles 16F 56H
115VW- Tonnage tax Scheme 11T 66
17

18. • Whether Business or Profession?
 Motor garage?
 Private tuitions by a Chartered Accountant?
 Vedic, astrological Consultant?
 Stock Brokers?
18
The word `business' is one of wide import and it means activity carried
on continuously and systematically by a person by the application of
his labour or skill with a view to earning an income. The expression
"business" does not necessarily mean trade or manufacture only -
Barendra Prasad Ray v ITO [1981] 129 ITR 295 (SC).
WHETHER BUSINESS OR PROFESSION?

19. • GENERAL PRINCIPLES:
 ‘Sales’, ‘Turnover’ and ‘Gross receipts’ are commercial terms
and should be construed in accordance with the method of
accounting regularly employed by the assessee.
 Limit of 200 lacs/50 lacs to be considered every year.
19
TURNOVER / GROSS RECEIPTS ?

20. • Whether the following shall be included/ excluded??
 Dividends, Interest, Rental Income: Excluded unless assessable as
business income.
 Excise duty & sales tax collected on sales: Included (net of taxes paid)
 Speculative transactions: the aggregate of both positive and negative
differences is to be considered as the turnover of such transactions for
determining the liability of audit vide section 44AB
 Discounts, Sales Returns etc.: Price of goods returned should be
deducted from the figure of turnover even if the returns are from the sales
made in the earlier year/s.
20
The term ‘turnover’ would mean the total sales after deducting
therefrom goods returned, price adjustments, trade discount and
cancellation of bills for the period of audit, if any. Adjustments which do
not relate to turnover should not be made e.g. writing off bad debts,
royalty etc.
TURNOVER / GROSS RECEIPTS ?

21.  Extra and ancillary charges like freight, insurance etc. charged in
the sales invoice: Included
 Reimbursement received from clients.: Reimbursement of expenses
incurred (e.g. packing, forwarding, freight, insurance, travelling etc.) and if
the same is credited to a separate account in the books, only the net
surplus on this account should be added to the turnover for the purposes
of Section 44AB;
 Advance received from customer and forfeited: Included in the gross
receipts in business.
 Sale proceeds from Fixed Asset: Excluded
 Share of profit of a partner of firm: Excluded
 Write Back Amount payable to creditors: Not included
 Travelling Agent receipt: ???
 Stock Broker making sales on behalf of clients: ???
21
TURNOVER / GROSS RECEIPTS ?

22. • PM is a Chartered Accountant and partner in a firm PMA. His salary
from firm is Rs 60 lacs. Is he liable to Tax audit as his income from
firm is chargeable as per section 28?
-Sagar Dutta Vs DCIT (ITAT Kolkata)
• Assuming that his salary is 40 lakhs, can he file return under 44ADA?
• A survey was conducted during the financial year 2020-21 and the
assessee surrendered stocks worth of Rs. 20 lakhs. During the
financial year 2019-20 the assessee has a turnover of Rs. 190 lakhs.
Should the value of surrendered stock be included in the turnover for
determining the applicability of section 44AB?
22
TURNOVER / GROSS RECEIPTS ?

23. 23
 Accountant as defined in Explanation below S. 288(2) Of IT Act, 1961.
 A Chartered Accountant as defined in section 2(1) (b) of the Chartered
Accountants Act, 1949 who holds a valid certificate to practice u/s 6(1) of
that Act.
 CA in practice (can represent even if he is disqualified)
 Part Time COP???
WHO CAN CONDUCT AUDIT

24. 24
Disqualified in
Companies Act u/s
141(3)
Disqualified under
Income Tax Act
DISQUALIFICATION- COMPANIES
As per clause (a) of explanation to Section 288:- In case of assessee
being company, the disqualification are same as provided under Section
141(3) companies Act, 2013.

25. 25
 Assessee himself
 In case of firm-any partner of the firm
 In case of AOP- member of the association
 In case of HUF- Member of the Family
 Person referred to in section 13(3)(a)/(b)/(c)/(cc);
 Other than above, person who is competent to verify return u/s 139/140
 Relative of the above persons.
 An officer or employee of assessee
 A partner or employee of an officer or employee of the assessee
 A person who has business relationship with the assessee as prescribed
(RULE 51A)
 A person who has been convicted by a court of an offence involving fraud
and a period of ten years has not elapsed from the date of conviction.
DISQUALIFICATION- OTHERS
As per clause (b) of explanation to Section 288:

26. 26
DISQUALIFICATION- OTHERS
 An individual who, or his relative or partner-
Provision Exception
I. Is holding any security, or interest
in, the assessee
Relative may hold security or interest
in the assessee of the face value not
exceeding Rs.1 Lacs
II. Is indebted to the assessee Relative may be indebted to the
assessee for an amount not
exceeding Rs. 1 Lacs.
III. Has given a guarantee or provided
any security in connection with the
indebtness of any third person to the
assesses.
Relative may give upto Rs. 1 Lacs.

27. 27
RELATIVE in relation to an individual means: (Explanation 2 to section 288)
a) Spouse of the Individual
b) Brother or sister of the Individual
c) Brother or sister of the spouse of the individual
d) Any lineal ascendant or descendant of the Individual
e) Any lineal ascendant or descendant spouse of the Individual
f) Spouse of the person referred above
g) Any lineal descendant of a brother or sister of either the Individual or
spouse of Individual.
DISQUALIFICATION- OTHERS

28. 28
RULE 51A: A person or a firm who, whether directly or indirectly, has
business relationship with assessee i.e. any transaction entered into for
commercial purpose except:
• In nature of professional services permitted to be rendered by auditor or
audit firm under Chartered Accountant Act 1949.
• In the ordinary course of business of co. at Arm Length Price like
• Sale of product or
• Service
• To auditor, as customer, in the ordinary course of business, by
companies engaged in business of telecommunications, airlines, hospitals,
hotels & such other similar businesses.
DISQUALIFICATION- OTHERS

29. 29
• LIMIT: 60
• 44AD/44ADA/AE Audit NOT COVERED in limit. (clarification dated 09th
November, 2011)
• In case the member is a partner of a firm of chartered accountants in
practice, the ceiling of 60 tax audit assignments shall be computed
with reference to each of the partner in the said firm. Where any
partner of the firm of chartered accountants in practice is also a partner of
any other firm or firms of chartered accountants in practice, the ceiling
limit of 60 shall apply with reference to all the firms together in
relation to such partner.
• Tax audit by Joint Auditors: Assignment will have to be considered in
case of the Joint Auditors Separately.
• Audit of one or more branches or head office: shall be considered one
assignment.
TAX AUDIT REPORT CEILING

30. 30
• Can a CA in practice who is giving accounting
services to a subsidiary, conduct tax audit of its
holding company?- No
• Can an Internal Auditor of any company issue
Form 15CB for that company? – No.
ISSUES

31. CLAUSES OF
FORM 3CD
31

32. 32
ICDS ADJUSTMENTS [CLAUSE 13(D)]
• Whether any adjustments required to be made to the profits or loss
for complying with the provisions of income computation and
disclosure standards notified under section 145(2)
• if answer to (d) above is in affirmative, give details of such
adjustments:

33. 13 (E) ICDS ADJUSTMENTS
33
ICDS
No
Particulars
Increase
in Profit
Decreas
e in
Profit
Net
effect
I Accounting Policies
II Valuation of Inventories
III Construction Contracts
IV Revenue Recognition
V Tangible Fixed Assets
VI Changes in Forex- Rates
VII Government grants
VIII Securities
IX Borrowing Costs
X Provisions, Contingent
Liabilities and Contingent
Assets

34. 13 (F)- DISCLOSURES AS PER ICDS
No disclosures in respect of following ICDS required-
– ICDS-VI- Changes in Foreign Exchange Rate
– ICDS-VIII- Securities
ICDS No Particulars
I Accounting Policies
II Valuation of Inventories
III Construction Contracts
IV Revenue Recognition
V Tangible Fixed Assets
VII Government grants
IX Borrowing Costs
X Provisions, Contingent Liabilities and Contingent
Assets
34

35. CLAUSE NO.14(A) & (B): METHOD OF VALUATION
OF CLOSING STOCK AND DETAILS OF DEVIATION
FROM SEC. 145A
 Inclusive Method
 Issues relating to GST and 145A-Guidance note?
 Also stocks as per ICDS (service and
construction industry).
35

36. CLAUSE NO.15: DETAILS OF CAPITAL ASSET
CONVERTED IN TO STOCK IN TRADE
 Description of capital asset.
 Date & cost of acquisition of the asset i.e. carrying amount
or cost of acquisition
 Amount at which asset is so converted.
36

37. CLAUSE NO.16: DETAILS OF AMOUNTS NOT
CREDITED TO P/L ACCOUNT BEING:
(a) Items falling within the scope of section 28.
(b) the proforma credits, drawbacks, refund of duty of customs or
excise or service tax, or refund of sales tax or value added tax where
such credits, drawbacks or refunds are admitted as due by
the authorities concerned
(c) Escalation claims accepted during the previous year
(d) Any other item of income
(e) capital receipt, if any
37

38. CLAUSE NO 17- VARIATION 50C/43CA
Where any land or building or both is transferred less than value
adopted or assessed or assessable by any authority of a State
Government referred to in section 43CA or 50C, please furnish:
–Details of property
–Consideration received or accrued
–Value adopted or assessed or assessable
What about:
a. Right in a property/development right?
b. Gift to related/unrelated person
c. Rural agriculture land
d. Transfer of capital asset recorded in personal books
e. Difference is within safe harbour limit
38

39.  Classification of asset
 Payment in excess of Rs 10000/- in cash
 Treatment of Excise duty, exchange fluctuation, subsidy grant
etc. on new assets.
 Depreciation allowable. (All onus on us)
CLAUSE NO.18: DEPRECIATION ALLOWABLE
UNDER THE I.T.ACT.
39

40. PAYMENT TO EMPLOYESS: [CLAUSE NO. 20(A)
& (B)]
40
a. Sub-Clause (a): Sum paid to employees bonus/commission,
where the same was payable as profit/dividend: Such sums
are not normally allowed in terms of section 36(1)(ii).
b. Clause (b): Employees’ contribution recd. against ESIC &
PF etc.: Section 36(1)(va): allowed as deduction if paid
within the due date i.e. date specified under the relevant
law.
Note: Cases now have held that even if paid before the date of
filing of return no disallowance, details to be given with
note.

41. CLAUSE 21(A)
 Details of amount debited to P&L being in the
nature of :
 Capital Expenditure
 Personal Expenditure
 Advertisement Exp. in any souvenir, brochure, tract,
pamphlet or the like published by political party
 Expenditure incurred at clubs being entrance fees &
subscriptions or cost for club services & facilities
used
 Exp. by way of penalty or fine for the violation of
any law for the time being in force
41

42. CLAUSE 21(A)
 Expenditure by way of any other penalty or fine not
covered above
 Expenditure incurred for any purpose which is an
offence or is prohibited under the law
42
CLAUSE 21(B)
 Amount inadmissible under section 40(a) is to be
reported here:
 Payment to non residents on which tax has not
been deducted or on which tax has been deducted
but has not been deducted

43. …..CONTI.
CLAUSE NO.21: SUB-CLAUSE (C) TO
(F)
43
(c) Amounts inadmissible u/s 40(b)/40(ba) and computation
thereof.
(d) Disallowance/Deemed Income u/s 40A(3): expenditure
exceeding Rs.10000/- made otherwise than by an account
payee cheque.
40A(3A)-Outstanding exp. of preceding year paid
during the year are also included.-
(e) Provision for payment of gratuity u/s 40A(7)
(f) Any sum paid by the assessee as an employer not allowable
u/s 40A(9).
(g) Liabilities of a contingent nature
(h) Deduction u/s 14A.
(i) Amount admissible u/s 36(1)(iii)i.e. capital borrowed for fixed
asset

44. CLAUSE NO.22: INTEREST TO MSME
• Disallowance of Interest under MSMED Act,2006
• The Tax Auditor is required to disclose the disallownace
of interest under MSME Act, 2006.
• Qualify if the client has not written to suppliers
regarding MSME Act.
44

45. CLAUSE NO.23: PAYMENTS TO PERSONS
SPECIFIED U/S 40A(2)(B)
 See the persons covered properly. (inter concerns-
substantial interest concept).
 To be reported only to the extent the same are included in the
P/L account.
 Receipts from related parties are not to be included.
 Management representations will have to be relied upon.
 Reference may be drawn from Statutory Records in
respect of Corporate entities.
45

46. CLAUSE NO.25: PROFITS CHARGEABLE TO
TAX U/S 41
 Relates only to cessation/remission of liability previously
claimed as deduction.
 Outstanding on account of loans/deposits that cease to be
payable are not included.
 However, advances received in the ordinary course of business,
barred by limitation are included.
46

47. EXPENDITURE ALLOWABLE ON PAYMENT BASIS
U/S 43B. (CLAUSE 26)
 PF/ESI: Whereas Employer’s contribution, deposited upto the due date
of filing of return is allowed, the employee’ s contribution shall be
disallowed if payment made beyond the ‘ due date ’ under the relevant
act.
 Sales Tax- deferment scheme
 Advance Customs Duty.
 Provision of Excise duty payable on stocks of FG and CENVAT
outstanding on stocks of RM.
 Interest accrued but not due owing to moratorium
47

48.  Amounts on which tax is deductible at source under
chapter XVII-B but has not been deducted or has been
deducted but not paid on or before the due date of
filing of return
 Any sum paid on account of fringe benefit tax (where
applicable)
 Any sum paid on account of wealth tax
 Royalty, licence fees, service fee which is levied by
SG undertaking by SG.
 Any payment which is chargeable under the head
salaries & payable outside India or to a non resident
but TDS has not been deducted on it or deducted but
not paid
48

49.  Any payment to PF or other Fund unless the
employer assessee has made effective
arrangements to ensure that tax shall be deducted
if any payments are made from the fund
 Any tax actually paid by an employer referred into
clause (10CC) of section 10.
10(10CC): Tax on non monetary perquisite of
employee if paid by the employer then it is exempt
for employee.
49

50. CLAUSE NO.27(A): CENVAT CREDITS
AVAILED & UTILISED.
 The CENVAT credit on RM and on capital goods should be stated.
 Reporting shall depend on the method of employed- i.e. inclusive
or exclusive.
 Inclusive method: the figure of duty utilised shall be the amount
of duty on RM consumed rather than what has been stated in
the CENVAT register.
50

51. CLAUSE NO.27(B): DETAILS OF PRIOR PERIOD
INCOME/EXPENSES
51
• Material charges/credits that arise in thecurrent period due to
error/omissions in preparation of FS of Earlier Year(s)
• Principles laid down in ICDS disclosure of prior period and
extraordinary items are to be considered.

52. TRANSACTION OTHER THAN BUSINESS
TRANSACTION[CLAUSE 28 & 29 & 29A]
• Receipts covered u/s 56(2)(viia)- not applicable now, due to 56(2)(x)
• Receipts covered u/s 56(2)(viib)- Consideration on issue of shares
which exceeds the fair market value.
52
CLAUSE 29A (INSERTED BY THE IT (EIGHTH
AMEND. RULES, 2018)
(a) Whether any amount is to be included as income chargeable under
the head 'income from other sources' as referred to in clause (ix) of
sub-section (2) of section 56? (Yes/No)- advance forfeited
(b) If yes, please furnish the following details:
• Nature of income :
• Amount thereof:

53. SECTION 2(24): INCOME INCLUDES
(xviii) Assistance in the form of a subsidy or grant or cash incentive
or duty drawback or waiver or concession or reimbursement (by
whatever name called) by the Central Government or a State
Government or any authority or body or agency in cash or kind to
the assessee 9[other than,—
53
(a)the subsidy or grant or reimbursement which is taken into account
for determination of the actual cost of the asset in accordance with the
provisions of Explanation 10 to clause (1) of section 43; or
(b)the subsidy or grant by the Central Government for the purpose of
the corpus of a trust or institution established by the Central
Government or a State Government, as the case may be];

54. CLAUSE 29B
54
(a) Whether any amount is to be included as income chargeable under
the head 'income from other sources' as referred to in clause (x) of sub-
section (2) of section 56? (Yes/No)
(b)If yes, please furnish the following details:
(i) Nature of income :
(ii) Amount thereof:

55. CLAUSE 30A- [INSERTED BY IT (EIGHTH AMDT.)
RULES, 2018]
55
• (a) Whether primary adjustment to transfer price, as referred to in
sub-section
1)of section 92CE, has been made during the previous year?
(Yes/No)
• If yes, please furnish the following details:—
– Under which clause of sub-section (1) of section 92CE
primary adjustment is made?
– Amount (in Rs.) of primary adjustment:
– Whether the excess money available with the associated
enterprise is required to be repatriated to India as per the
provisions of sub-section (2) of section 92CE? (Yes/No)
– If yes, whether the excess money has been repatriated within
the prescribed time (Yes/No)
– If no, the amount (in Rs.) of imputed interest income on such
excess money which has not been repatriated within the
prescribed time:

56. CLAUSE 30B-
56
(a) Whether the assessee has incurred expenditure during the previous
year by way of interest or of similar nature exceeding one crore
rupees as referred to in sub- section (1) of section 94B?
(Yes/No.)
• If yes, please furnish the following details:—
– Amount (in Rs.) of expenditure by way of interest or of similar
nature incurred:
– Earnings before interest, tax, depreciation and amortization
(EBITDA) during the previous year (in Rs.)
– Amount (in Rs.) of expenditure by way interest or of similar nature
as per (i) above which exceeds 30% of EBITDA as per (ii) above :
– Details of interest expenditure brought forward as per sub-
section (4) of section 94B:
– Details of interest expenditure carried forward as per sub-section
(4) of section 94B:

57. CLAUSE NO.31(A): LOANS/DEPOSITS TAKEN OR
ACCEPTED DURING THE YEAR EXCEEDING LIMIT
SPECIFIED U/S 269SS
57
 Disclosure required with PAN/Adhaar where individual items are
less than 20000/- but are greater when taken together.
 Mixed accounts maintained by assessee are to be segregated.
 Does not apply to Govt. & Banking companies
 Transfer entries also constitute ‘ acceptance otherwise than by a/c
payee cheque’ hence are to be reported.
 Accepting cash from sister concerns, current accounts with
directors- may not be covered.

58. CLAUSE NO.31(B):
 Specific reporting requirements for “Specified Sum”.
 Reporting to be on the same lines as
‘loans/deposits’ received.
 “Specified Sum” defined u/s 269SS, Explanation
(iv) as under:
“Specified sum means any sum of money receivable, whether
as advance or otherwise, in relation to transfer of an
immovable property, whether or not the transfer takes place.”
58

59. Section 269ST- [Mode of undertaking transactions.]
269ST. No person shall receive an amount of two lakh rupees or
more—
(a) in aggregate from a person in a day; or
(b) in respect of a single transaction; or
(c)in respect of transactions relating to one event or occasion
from a person,
otherwise than by an account payee cheque or an account payee
bank draft or use of electronic clearing system through a bank
account:
CLAUSE 31(BA), (BB), (BC) & (BD)- PARTICULARS
RECEIPTS/PAYMENTS IN AN AMOUNT EXCEEDING
LIMIT SPECIFIED U/S 269ST
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Note: clause (ba), (bb), (bc), (bd) shall not apply in case of receipt by
or payment to a Govt. Co., a banking Co., a post office saving bank , a
co-operative bank or a transaction referred to in section 269SS or in
case of person referred to in Notification No. S.O. 2065(E) dated
03.07.2017)

60. Section 269T prescribes the mode of payment of only in respect of
deposits. However the clause talks of both – loans as well as
advances, hence both should be included.
60
CLAUSE NO.31(C): LOANS/DEPOSITS REPAID
DURING THE YEAR EXCEEDING THE LIMIT
SPECIFIED U/S 269T

61. CLAUSE NO.31(C): LOANS/DEPOSITS REPAID
DURING THE YEAR EXCEEDING THE LIMIT
SPECIFIED U/S 269T
 Earlier- it was required to be reported whether any amounts have
been repaid otherwise than by way of an account payee cheque or DD.
 Now: New sub clause inserted requiring a certification that in case of
amounts accepted by way of cheque/DD, such cheque/DD are
accounte payee or not.
61

62. NEW CLAUSES 31(D), 31(E)- REPORTING IN CASE
ASSESSEE HIMSELF IS RECIPIENT OF REPAYMENT
PROCEEDS OF LOAN IN EXCESS OF THE LIMIT
SPECIFIED U/S 269T
• Section 31(d)- Reporting in case repayment has been received
otherwise than by way of a cheque/DD/ECS. (i.e. cash)
• Section 31(e)- Reporting in case repayment has been received by
way of a cheque/DD which is not account payee.
62

63. CLAUSE NO.32 : BROUGHT FORWARD LOSSES
AND UNABSORBED DEPRECIATION
 Details to be given as per Format prescribed.
 Auditor shall have to verify all assessment records including Returns,
Asst. Orders etc.
 Reference may also be drawn from preceding years’ tax audit report,
more so because though B/f losses can be carried forward only for 8
years, there is no time limit in case of depreciation.
 Appropriate disclosures be made in cases where appeals may have
been decided though effect might not have been given.
63

64. …. Contd.
• Disallowances in terms of Section 79
• Speculation losses in terms of explanation to section 73 to be
quantified.
• Losses in respect of specified businesses in terms of Section 35AD.-
Set off only against specified business or carried forward to be set-off
subsequently.
64
CLAUSE NO.32 : BROUGHT FORWARD LOSSES
AND UNABSORBED DEPRECIATION

65. 65
CHANGE IN CLAUSE 32(A) IN CASE
SECTION 115BAA OPTED

66. 66
SECTION 115BAA
•Applicable to every domestic company
•Effective tax rate 25.17%
•No MAT Credit
•No exemption u/s 10AA
•No additional depreciation u/s 32 and investment allowance u/s 32AD
•No deduction 33AB, 33ABA, 35, 35AD, 35CCC,35CCD
•No deduction under chapter VI-C except 80JJAA.
•No set off of any loss carried forward or depreciation from earlier years, if
such losses were incurred in respect of the aforementioned deduction.
•No claim by amalgamated company for set off of c/f losses or unabsorbed
depreciation if such losses or unabsorbed depreciation is on account of
the above deduction.

67. CLAUSE NO. 34(A) : LIABILITY FOR DEDUCTION
AND COLLECTION OF TAX AT SOURCE
 Cases in which no tax has been deducted at all are now required to
be reported under this clause.
 Shortfall in deduction also to be reported.
 Tax deducted late- has relevance after inclusion of 40(a)(ia)
 Tax deducted but not deposited at all (Prosecution 276B).
67

68. CLAUSE NO. 34(B) :
• Furnishing of statement of tax deducted and collected at source.
• Prior to 20.08.18- To give only the if the statement of tax deducted or
collected at source has not been filed within prescribed time.
• w.e.f 20.08.18- to be given if assessee is required to furnish
statements of TDS
68
• Whether the assessee is liable to pay interest u/s 201(1A) or section
206C(7)
• Furnishing of statement in case the assessee is liable and even if he
has paid.
• Here the reporting has to be done whether or not there is any default by
the assessee.
`
CLAUSE NO. 34(C) :

69. CLAUSE NO. 35 (A): QUANTITATIVE DETAILS OF
GOODS TRADED.
 Information regd. principal items of traded goods shall have to be
called for from the management. Principal items would constitute
more than 10% of the value of turnover.
 Reconcile the same with the GST returns.
 Reconcile the same with the figures of closing stocks and now
valuation on account of ICDS.
 Information is required to be given to the extent the same is
practically possible.
69

70. CLAUSE NO. 36A : DEEMED DIVIDEND
 (a) Whether the assessee has received any amount in the nature of
dividend as referred to in sub-clause 2(22)(e).
 (b) if yes please furnish the following details:
(i) Amount received (in Rs.)
(ii) Date of receipt
70

71. CLAUSE NO. 35(B) : QUANTITATIVE DETAILS OF
STOCKS IN MANUFACTURING CONCERN.
 Information relating to R.M., F.G and By Products etc. to be given.
 Reconcile with various returns of other departments.
 Information relating to yield, shortage etc. is to be given, based on the
records of the assessee.
 Where stock records are not maintained by the assessee, the auditor
may consider qualifying the report, considering other circumstances of
the case.
71

72. CLAUSE NO. 37 : WHETHER COST AUDIT OF THE
ASSESSEE WAS CARRIED OUT DURING THE RELEVANT
YEAR?
 Have a list of industry where cost audit is mandatory.
 Information to be called for from the mgt.
 The fact that a cost audit was in fact carried out may also get
revealed from a perusal of the cost records of the assessee, where
maintained.
 Auditor need not express an opinion in case such audit is required
but not carried out.
 Cost audit of earlier years, carried out during the relevant previous
year need not be reported.
72

73. CLAUSES 38 & 39
• Clause 38- whether any audit conducted under Central Excise Act,
1944, if yes, give details of disqualification/disagreement…. (Now to
give detail about GST Audit)
• Clause 39- whether any audit was conducted u/s 72A of the
Finance Act, 1994 in relation to valuation of taxable services, if
yes, give the details of disqualification/disagreement…(Now to
give detail about GST Audit)
73

74. CLAUSE NO.40 : ACCOUNTING RATIOS WITH
CALCULATION
 Applicable only in case of
manufacturing/trading concerns.
 Ratios are to be calculated for the business as a
whole.
 Stock in trade/Turnover And Material
Consumed/Finished Goods Ratios are to be
calculated value wise, not quantity wise.
 Stock in trade- Only value of Finished Goods is to
be included. (even WIP is not to be included)
 Material Consumed- would include stores,
spares and loose tools as well. 74

75. CLAUSE 41
• Details of demand raised or refund issued
during the previous year under any tax
laws other than Income Tax Act, 1961 and
Wealth Tax Act, 1957 along with details of
relevant proceedings.
75

76. CLAUSE 42
(a) Whether the assessee is required to furnish statement in Form No.61
or Form No. 61A or Form No. 61B (Statement of reportable account?
(Yes/No)
(b) If yes, please furnish:
i) Departments RE ID No.
ii) Type of form
iii) Due date of furnishing
iv) Date of furnishing, if furnished.
v) Whether all transactions reported, if not, report list of
transactions not reported.
76

77. CLAUSE 43
(a) Whether the assessee or its parent entity or alternate reporting
entity is liable to furnish the report as referred to in sub-section (2)
of section 286 (Yes/No) CBC-Reporting.(report of international
group)
(b) if yes, please furnish the following details:
(i) Whether report has been furnished by the assessee or its
parent entity or an alternate reporting entity
(ii) Name of parent entity
(iii) Name of alternate reporting entity (if applicable)
(iv) Date of furnishing of report
77

78. CLAUSE 44- REPORTING IN RESPECT OF GST
Break-up of total expenditure of entities
registered or not registered under the GST:
• Total amount of Expenditure incurred during the year
• Expenditure in respect of entities registered under GST
– Relating to goods or services exempt from GST
– Relating to entities falling under composition scheme
78
– Relating to other registered entities
– Total payment to registered entities
• Expenditure relating to entities not registered under GST.

79. 79
THANK YOU