After hectic Tax Audit times, for AY 2022-23, now it’s time for some Tax Audit Fun Moments. So, in this Blog I am presenting some hilarious Tax Audit QAs/visualisations conceived and visualised by me, which will help You in understanding all important reporting clauses in the Form 3CD Annexure in the Tax Audit Report (TAR), in a funny yet purposeful and useful manner.
1. Clause 44 of TAR
Tax Auditor to an ‘Expense’ head: Why are you so upset & angry?
Expense head: I am upset as earlier we all were united under one head. Now you are trying to break us & divide into GST registered/unregistered/composite dealer/ exempt heads, knowing fully that my breakup will not determine my allowability in ITR.
Clause 44 of TAR requires Reporting in the below format:
| S.No. | Total amount of Expenditure incurred during the year | Expenditure in respect of entities registered under GST | Expenditure relating to Entities not registered under GST | |||
| Relating to goods or services exempt from GST | Relating to entities falling under Composition Scheme | Relating to Other Registered Entities | Total Payment to Registered Entities | |||
| (1) | (2) | (3) | (4) | (5) | (6) | (7) |
2. Clause 8 of TAR
Que: Why did detective Byomkesh Bakshi get a notice from Income Tax Department?
Ans. Because he has not got his books of accounts tax audited for his consultancy receipts. [Section 271B of Income Tax Act & Clause 8 of TAR].
3. Clause 8a of TAR
Que: Why did Iron Man get a ‘New-Pinch’ from his Tax Auditor?
Ans: Because he has opted for the New Tax Regime [Clause 8a of TAR].
Clause 8 & 8a of TAR requires reporting in below manner:
| 08 | Indicate the relevant clause of section 44AB under which the audit has been conducted | Relevant clause of section 44AB under which the audit has been conducted |
| 08a | Whether the assessee has opted for taxation under section 115BA/115BAA/115BAB/115BAC/115BAD? | No |
4. Clause 21(b) & 34 of TAR
Que: Why did “Daya-bhav” Foundation, get a qualification in its Tax Audit Report?
Ans: Because guided by its ‘daya-bhav’ philosophy, it didn’t deduct TDS on salary of its employees & other payments. [Clause 21(b) & 34 of TAR].
Clause 21(b) of TAR requires reporting in below manner:
| 21 | a) | Please furnish the details of amounts debited to the profit and loss account, being |
| b) | Amounts inadmissible under section 40(a): |
ii |
as payment to resident referred to in sub-clause (ia) |
||||||||||||||||||||||||||
AB |
Details of payment on which tax is not deducted: |
|
|||||||||||||||||||||||||
Date of payment |
Amou nt of paym ent |
Natur e of paym ent |
Name of the payee |
PANof the payee |
Aadha ar no |
Coun try |
Addr ess Line 1 |
Addre ss Line 2 |
Pinco de |
City or Tow n or District |
Local ity or Area |
Post Offic e |
State |
Rem arks if any: |
|||||||||||||
Details of payment on which tax has been deducted but has not been paid on or before the due date specified in sub- section (1) of section 139. |
|
||||||||||||||||||||||||||
Date of payme nt |
Amo unt of pay ment |
Natu re of pay ment |
Nam e of the paye r |
PANof the Paye r |
Aadh aar no |
Coun try |
Add ress Line 1 |
Add ress Line 2 |
Pin cod e |
City or Tow n or Dist rict |
Local ity or Area |
Post Offic e |
State |
Amo unt of tax dedu cted |
Amo unt out of (VI)deposited, if any |
Rem arks if any: |
|||||||||||
Clause 34 of TAR requires reporting in below manner:
34. (a) Whether the assessee is required to deduct or collect tax as per the provisions of Chapter XVII-B or Chapter XVII-BB, if yes please furnish:
TaxdeductionandcollectionAccountNumber(TAN) |
Section |
Natureofpayment |
Totalamountofpaymentor receiptof thenature specified in column(3) |
Totalamounton whichtax wasrequiredto bededucted orcollected out of (4) |
Totalamounton whichtax wasdeductedorcollected atspecified rate out of(5) |
Amountof taxdeductedorcollectedout of (6) |
Totalamounton whichtax wasdeductedorcollected at less than specified rate out of (7) |
Amountof taxdeductedorcollectedon (8) |
Amount of tax deductedor collectednot depositedto the creditof the CentralGovernment out of (6) and (8) |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
(9) |
(10) |
(b) Whether the assessee is required to furnish the statement of tax deducted or tax collected. If yes, please furnish the details:
| Tax deduction and collection Account Number(TAN) |
Type of Form | Due date for furnishing | Date of furnishing, if furnished |
Whether the statement of tax deducted or collected contains information about all details/ transactions which are required to be reported. If not, please furnish list of of details/ transactions which are not reported. |
(c) Whether the assessee is liable to pay interest under section 201(1A) or section 206C(7). If yes, please furnish:
| Tax deduction and collection Account Number (TAN) | Amount of interest under section 201(1A)/206C(7) is payable | Amount paid out of column (2) along with date of payment. |
5. Clause 29B of TAR
Que: Why did ‘Balveer’ get worried about his Tax Audit Report?
Ans: He has received a Gift from ‘Santa’, which his Tax Auditor has reported in Clause 29B in his TAR. [Section 56(2)(x)].
Clause 29B requires reporting in below manner:
| 29 | B | 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 | ||||
| Nature of Income | Amount | Remarks if any: | ||||
6. Clause 30C of TAR
Que: Why did Shah Rukh Khan get furious with his Tax Auditor?
Ans. (strictly fictional) He has received some CCDs from Byju’s Singapore based Holding Company, as a free token of love n affection for his “YaadGAAR” contribution in Kids learning and education. [Clause 30C on GAAR].
Clause 30C of TAR requires reporting in below manner:
| 30 | C | Whether the assessee has entered into an impermissible avoidance arrangement, as referred to in section 96 during the
previous year (This Clause is kept in abeyance till 31st March,2022) |
|||
| Nature of the impermissible avoidance arrangement | Amount (in Rs) of tax benefit in the previous year arising, in aggregate, to all
parties to the arrangement |
Remarks if any: | |||
And the final one….
God to Tax Auditor: Dear hardworking Soul, I am happy with your devotion. Ask anything & I will grant you the same.
Tax Auditor: Dear God, please give me the special power that my digital signature & attachments to my TAR get uploaded glitch free.
God (puzzled): Vatsa, that is not in my hands, please consult Infosys…
Author Bio
